Corporations Act 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.5 - VOLUNTARY WINDING UP  

Note: This Part applies to a sub-fund of a CCIV in a modified form: see Division 5 of Part 8B.6 .

Division 1A - Preliminary  

SECTION 489F  

489F   MEANING OF PROPERTY  

In this Part:

property
of a company includes PPSA retention of title property, if the security interest in the property is vested in the company because of the operation of any of the following provisions:

(a) section 267 or 267A of the Personal Property Securities Act 2009 (property subject to unperfected security interests);

(b) section 588FL of this Act (collateral not registered within time).

Note: See sections 9 (definition of property ) and 51F (PPSA retention of title property).

Division 1 - Resolution for winding up  

SECTION 490   WHEN COMPANY CANNOT WIND UP VOLUNTARILY  

490(1)   
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; or

(c)    

the company is a trustee company that is in the course of administering or managing one or more estates.

490(2)    

A person with a proper interest in the estate referred to in paragraph (1)(c) , or who has any claim in respect of the estate, is entitled to be heard in a proceeding before the Court for leave under subsection (1) .

SECTION 491   CIRCUMSTANCES IN WHICH COMPANY MAY BE WOUND UP VOLUNTARILY  

491(1)    
Subject to section 490 , a company may be wound up voluntarily if the company so resolves by special resolution.

491(2)    
A company must:

(a)    

within 7 days after the passing of a resolution for voluntary winding up, lodge with the Registrar a notice setting out the text of the resolution; and

(b)    

within the period ascertained in accordance with the regulations, cause a notice setting out the prescribed information about the resolution to be published in the prescribed manner.

491(3)    

A lodgement under paragraph (2)(a) must meet any requirements of the data standards.

SECTION 493  

493   EFFECT OF VOLUNTARY WINDING UP  
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.

SECTION 493A   EFFECT OF VOLUNTARY WINDING UP ON COMPANY ' S MEMBERS  

493A(1)   Transfer of shares.  

A transfer of shares in a company that is made after the passing of the resolution is void except if:

(a) both:

(i) the liquidator gives written consent to the transfer; and

(ii) that consent is unconditional; or

(b) all of the following subparagraphs apply:

(i) the liquidator gives written consent to the transfer;

(ii) that consent is subject to one or more specified conditions;

(iii) those conditions have been satisfied; or

(c) the Court makes an order under subsection (4) authorising the transfer.

493A(2)   [ Liquidator's consent to transfer]  

The liquidator may only give consent under paragraph (1)(a) or (b) if he or she is satisfied that the transfer is in the best interests of the company ' s creditors as a whole.

493A(3)   [ Application to Court to authorise transfer]  

If the liquidator refuses to give consent under paragraph (1)(a) or (b) to a transfer of shares in the company:

(a) the prospective transferor; or

(b) the prospective transferee; or

(c) a creditor of the company;

may apply to the Court for an order authorising the transfer.

493A(4)   [ Court may authorise transfer]  

If the Court is satisfied, on an application under subsection (3), that the transfer is in the best interests of the company ' s creditors as a whole, the Court may, by order, authorise the transfer.

493A(5)   [ Application to Court to set aside conditions]  

If the liquidator gives consent under paragraph (1)(b) to a transfer of shares in the company:

(a) the prospective transferor; or

(b) the prospective transferee; or

(c) a creditor of the company;

may apply to the Court for an order setting aside any or all of the conditions to which the consent is subject.

493A(6)   [ Court may set aside conditions]  

If the Court is satisfied, on an application under subsection (5), that any or all of the conditions covered by the application are not in the best interests of the company ' s creditors as a whole, the Court may, by order, set aside any or all of the conditions.

493A(7)   [ Liquidator entitled to be heard]  

The liquidator is entitled to be heard in a proceeding before the Court in relation to an application under subsection (3) or (5).

493A(8)   Alteration in the status of members.  

An alteration in the status of members of a company that is made after the passing of the resolution is void except if:

(a) both:

(i) the liquidator gives written consent to the alteration; and

(ii) that consent is unconditional; or

(b) all of the following subparagraphs apply:

(i) the liquidator gives written consent to the alteration;

(ii) that consent is subject to one or more specified conditions;

(iii) those conditions have been satisfied; or

(c) the Court makes an order under subsection (12) authorising the alteration.

493A(9)   [ Liquidator consent to alteration]  

The liquidator may only give consent under paragraph (8)(a) or (b) if he or she is satisfied that the alteration is in the best interests of the company ' s creditors as a whole.

493A(10)   [ Where liquidator must refuse]  

The liquidator must refuse to give consent under paragraph (8)(a) or (b) if the alteration would contravene Part 2F.2 .

493A(11)   [ Application to Court to authorise alteration]  

If the liquidator refuses to give consent under paragraph (8)(a) or (b) to an alteration in the status of members of a company:

(a) a member of the company; or

(b) a creditor of the company;

may apply to the Court for an order authorising the alteration.

493A(12)   [ Court may authorise alteration]  

If the Court is satisfied, on an application under subsection (11), that:

(a) the alteration is in the best interests of the company ' s creditors as a whole; and

(b) the alteration does not contravene Part 2F.2 ;

the Court may, by order, authorise the alteration.

493A(13)   [ Application to Court to set aside conditions]  

If the liquidator gives consent under paragraph (8)(b) to an alteration in the status of members of a company:

(a) a member of the company; or

(b) a creditor of the company;

may apply to the Court for an order setting aside any or all of the conditions to which the consent is subject.

493A(14)   [ Court may set aside conditions]  

If the Court is satisfied, on an application under subsection (13), that any or all of the conditions covered by the application are not in the best interests of the company ' s creditors as a whole, the Court may, by order, set aside any or all of the conditions.

493A(15)   [ Liquidator entitled to be heard]  

The liquidator is entitled to be heard in a proceeding before the Court in relation to an application under subsection (11) or (13).

SECTION 494   DECLARATION OF SOLVENCY  

494(1)   [ Declaration by majority of directors]  

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.

494(2)   [ Statement of affairs]  

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.

494(3)   [ Requirements as to declaration]  

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.

494(4)   [ Offence]  

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.

494(5)   [ Presumption against director]  

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.

Division 2 - Members' voluntary winding up  

SECTION 495   APPOINTMENT OFLIQUIDATOR ETC.  

495(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.

Note: For rules about the liquidator ' s remuneration, see Division 60 of Part 3 of Schedule 2 . For rules about convening meetings, see Division 75 of Part 3 of Schedule 2 .

495(2)    
If a vacancy occurs in the office of a liquidator (whether by death, resignation or otherwise), the company in general meeting may fill the vacancy by the appointment of a liquidator.

495(3)    
A general meeting may be convened for the purposes of subsection (2) by any contributory or, if there were 2 or more liquidators, by the continuing liquidators.

495(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.

SECTION 496   DUTY OF LIQUIDATOR WHERE COMPANY TURNS OUT TO BE INSOLVENT  

496(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.

496(2)    
(Repealed by No 11 of 2016, s 3, Sch 2 [ 159].)

496(3)    
(Repealed by No 11 of 2016, s 3, Sch 2 [ 159].)

496(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) .

496(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.

496(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.

496(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.

496(8)    

After the meeting the winding up must proceed as if it were a creditors ' voluntary winding up.

496(9)    

An offence based on subsection (4) , (5) , (6) , (7) or (8) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

Division 3 - Creditors ' voluntary winding up  

Subdivision A - Liquidation process  

SECTION 497   INFORMATION ABOUT THE COMPANY ' S AFFAIRS  

497(1)    

The liquidator of the company must, within 10 business days after the day of the meeting of the company at which the resolution for voluntary winding up is passed:

(a)    send to each creditor:

(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; and

(b)    lodge a copy of the documents sent in accordance with paragraph (a).

497(2)    

The list referred to in subparagraph (1)(a)(ii) must identify any creditors that are related entities of the company.

497(3)    

Unless the Court orders otherwise, nothing in subsection (1) requires the liquidator to send the list referred to in subparagraph (1)(a)(ii) to a creditor whose debt does not exceed $1,000.

497(4)    

Within 5 business days after the day of the meeting of the company at which the resolution for voluntary winding up is passed or such longer period as the liquidator allows, the directors of the company must give the liquidator a report, in the prescribed form, about the company ' s business, property, affairs and financial circumstances.

497(5)    

An offence based on subsection (4) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code .

497(6)    

The liquidator must, within 10 business days after receiving a report under subsection (4) , lodge a copy of the report.

497(7)    

A person must not contravene subsection (6) .

497(8)    

An offence based on subsection (7) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code .

497(9)    
Subsection (7) does not apply to the extent that the person has a reasonable excuse.

Note: A defendant bears an evidential burden in relation to the matter in this subsection, see subsection 13.3(3) of the Criminal Code .

SECTION 498   DECLARATION THAT COMPANY ELIGIBLE FOR THE SIMPLIFIED LIQUIDATION PROCESS  

498(1)    
The directors of a company must give the liquidator of the company a declaration in accordance with this section if the directors believe on reasonable grounds that, on the declaration being given, the eligibility criteria for the simplified liquidation process will be met in relation to the company.

498(2)    
The declaration must:

(a)    be given within 5 business days after the day of the meeting of the company at which the resolution for voluntary winding up is passed; and

(b)    if there is a prescribed form for the declaration - be in the prescribed form; and

(c)    if the regulations prescribe information to be included in the declaration - include that information.

498(3)    

The regulations may prescribe information to be included in a declaration under this section.

SECTION 499   LIQUIDATORS  

499(1)    

The company in general meeting must appoint a liquidator for the purpose of winding up the affairs and distributing the property of the company.

499(2)    

However, subsection (1) does not apply to the company if:

(a) section 446A or 446AA applies in relation to the company; or

(b) regulations made for the purposes of section 446B have the effect that the company is taken to have passed a special resolution under section 491 that the company be wound up voluntarily.

499(2A)    

If section 446A applies in relation to the company because of paragraph 446A(1)(a) :

(a) the company ' s creditors may, at the meeting at which the resolution referred to in that paragraph is passed, appoint a person to be liquidator for the purpose of winding up the affairs and distributing the property of the company; and

(b) if an appointment is not made under paragraph (a) of this subsection before the end of the meeting at which the resolution referred to in paragraph446A(1)(a) is passed:

(i) the company ' s creditors are taken to have appointed the administrator of the company to be liquidator for the purpose of winding up the affairs and distributing the property of the company; and

(ii) the appointment under subparagraph (i) of this paragraph takes effect at the end of that meeting.

499(2B)    

If section 446A applies in relation to the company because of paragraph 446A(1)(b) :

(a) the company ' s creditors are taken to have appointed the administrator of the company to be liquidator for the purpose of winding up the affairs and distributing the property of the company; and

(b) the appointment takes effect at the time referred to in that paragraph.

499(2C)    

If section 446A applies in relation to the company because of paragraph 446A(1)(c) :

(a) the company ' s creditors may, at the meeting at which the resolution referred to in subparagraph 446A(1)(c)(ii) is passed, appoint a person to be liquidator for the purpose of winding up the affairs and distributing the property of the company; and

(b) if an appointment is not made under paragraph (a) of this subsection before the end of the meeting at which the resolution referred to in subparagraph 446A(1)(c)(ii) is passed:

(i) the company ' s creditors are taken to have appointed the administrator of the deed to be liquidator for the purpose of winding up the affairs and distributing the property of the company; and

(ii) the appointment under subparagraph (i) of this paragraph takes effect at the end of that meeting.

499(2D)    
If section 446AA applies in relation to the company because of paragraph 446AA(1)(a) :

(a) the Court may, immediately after it makes the order referred to in that paragraph, appoint a person to be the liquidator for the purpose of winding up the affairs and distributing the property of the company; and

(b) if no appointment is made under paragraph (a) of this subsection:

(i) the company is taken to have appointed the administrator of the deed of company arrangement referred to in section 446AA to be the liquidator for the purpose of winding up the affairs and distributing the property of the company; and

(ii) the appointment takes effect at the time referred to in paragraph 446AA(1)(a) .

499(2E)    
If section 446AA applies in relation to the company because of paragraph 446AA(1)(b) :

(a) the company is taken to have appointed the administrator of the deed of company arrangement referred to in section 446AA to be the liquidator for the purpose of winding up the affairs and distributing the property of the company; and

(b) the appointment takes effect at the time referred to in subparagraph 446AA(1)(b)(ii) .

499(2F)    
If regulations made for the purposes of section 446B have the effect that a company under administration is taken to have passed a special resolution under section 491 that the company be wound up voluntarily:

(a) the company is taken to have appointed the administrator of the company to be the liquidator for the purpose of winding up the affairs and distributing the property of the company; and

(b) the appointment takes effect when the resolution is taken to have been passed.

499(2G)    
If regulations made for the purposes of section 446B have the effect that a company subject to a deed of company arrangement is taken to have passeda special resolution under section 491 that the company be wound up voluntarily:

(a) the company is taken to have appointed the administrator of the deed to be the liquidator for the purpose of winding up the affairs and distributing the property of the company; and

(b) the appointment takes effect when the resolution is taken to have been passed.

499(3)    

If a liquidator, other than a liquidator appointed by, or by the direction of, the Court resigns:

(a) the Court; or

(b) ASIC; or

(c) the creditors;

may fill the vacancy by the appointment of a liquidator.

Note: If the registration of a liquidator is suspended or cancelled, ASIC must fill the vacancy: see section 40-111 of Schedule 2 .

499(3A)    
(Repealed by No 11 of 2016, s 3, Sch 2 [ 164] (effective 1 March 2017).)

499(4)    

If ASIC fills a vacancy in the office of a liquidator under subsection (3), ASIC must:

(a) publish notice of the filling of the vacancy; and

(b) publish the notice in the prescribed manner.

499(5)    

If ASIC or the Court fills a vacancy in the office of a liquidator under subsection (3), the liquidator is taken, for the purposes of this Act, to be appointed by the creditors.

499(6)    
(Repealed by No 11 of 2016, s 3, Sch 2 [ 164] (effective 1 March 2017).)

499(7)    
(Repealed by No 11 of 2016, s 3, Sch 2 [ 164] (effective 1 March 2017).)

SECTION 500   EXECUTION AND CIVIL PROCEEDINGS  

500(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.

500(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.

500(3)    

The Court may require any contributory, trustee, receiver, banker, agent, officer or employee 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 of the company or books in his, her or its hands to which the company is prima facie entitled.

Subdivision B - Simplified liquidation process for creditors ' voluntary winding up of an insolvent company  

SECTION 500A   LIQUIDATOR MAY ADOPT THE SIMPLIFIED LIQUIDATION PROCESS  

500A(1)    
The liquidator may adopt the simplified liquidation process for the purpose of winding up the affairs and distributing the property of a company in a creditors ' voluntary winding up, if the liquidator believes on reasonable grounds that the eligibility criteria are met in relation to the company.

500A(2)    
However, the liquidator must not adopt the simplified liquidation process if:

(aa)    

the company is, or is a related body corporate of, a body regulated by APRA (within the meaning of the Australian Prudential Regulation Authority Act 1998 ); or

(a)    

more than 20 business days have passed since the day on which the triggering event occurred; or

(b)    the liquidator has not given each member and creditor of the company notice in accordance with subsection (3) ; or

(c)    at least 25% in value of the creditors request the liquidator under section 500AB not to follow the simplified liquidation process in relation to the company.

500A(3)    
At least 10 business days before adopting the simplified liquidation process, the liquidator must give each member and creditor of the company notice in writing that includes the following:

(a)    a statement that the liquidator believes on reasonable grounds that the eligibility criteria for the simplified liquidation process will be met in relation to the company when the process is adopted;

(b)    an outline of the simplified liquidation process containing the prescribed information (if any);

(c)    a statement that the liquidator will not adopt the simplified liquidation process if at least 25% in value of the creditors direct the liquidator in writing not to do so;

(d)    prescribed information on how a creditor may give a direction in writing not to adopt the simplified liquidation process.

SECTION 500AAA  

500AAA   MEANING OF TRIGGERING EVENT  

Each of the following is a triggering event in relation to a company:

(a)    a special resolution under section 491 that the company be wound up voluntarily is passed;

(b)    if section 446A applies in relation to the company because of paragraph 446A(1)(a) - the resolution referred to in that paragraph is passed;

(c)    if section 446A applies in relation to the company because of paragraph 446A(1)(b) - the company first contravenes subsection 444B(2) ;

(d)    if section 446A applies in relation to the company because of paragraph 446A(1)(c) - the resolution referred to in subparagraph 446A(1)(c)(ii) is passed;

(e)    if section 446AA applies in relation to the company because of paragraph 446AA(1)(a) - the Court makes an order under section 445D terminating a deed of company arrangement in relation to the company;

(f)    if section 446AA applies in relation to the company because of paragraph 446AA(1)(b) - the circumstances specified in the deed of company arrangement in which the deed is to terminate and the company is to be wound up first exist;

(g)    if regulations made for the purposes of section 446B have the effect that the company is taken to have passed a special resolution under section 491 that the company be wound up voluntarily - that special resolution is taken to have passed, under the regulations;

(h)    any other event prescribed by the regulations.

SECTION 500AA   ELIGIBILITY CRITERIA FOR THE SIMPLIFIED LIQUIDATION PROCESS  

500AA(1)    
The eligibility criteria for the simplified liquidation process are met in relation to a company if:

(a)    a triggering event occurs in relation to the company; and

(b)    subsection 497(4) (report on company ' s business affairs etc.) and section 498 (declaration of eligibility for simplified liquidation process) have been complied with, or are taken to have been complied with, in relation to the company; and

(c)    the company will not be able to pay its debts in full within a period not exceeding 12 months after the day on which the triggering event occurs; and

(d)    if the regulations prescribe a test for eligibility based on the liabilities of the company - that test is satisfied on the day on which the triggering event occurs; and

(e)    no person who:

(i) is a director of the company; or

(ii) has been a director of the company within the 12 months immediately preceding the day on which the triggering event occurs;

has been a director of another company that has undergone restructuring or been the subject of a simplified liquidation process within a period prescribed by the regulations, unless exempt under regulations made for the purposes of subsection (2) of this section; and

(f)    the company has not undergone restructuring or been the subject of a simplified liquidation process within a period prescribed by the regulations, unless exempt under regulations made for the purposes of subsection (2) of this section; and

(g)    

if the company is required by a taxation law (within the meaning of the Income Tax Assessment Act 1997 ) to give a return, notice, statement, application or other document before the day the liquidator is appointed - the company has substantially complied with that requirement.

500AA(2)    
The regulations may prescribe:

(a)    tests for eligibility based on the liabilities of companies for the purposes of paragraph (1)(d) ; and

(b)    circumstances in which the directors of companies are exempt from the requirement in paragraph (1)(e) ; and

(c)    circumstances in which companies are exempt from the requirement in paragraph (1)(f) .

SECTION 500AB  

500AB   CREDITORS MAY REQUEST LIQUIDATOR NOT TO FOLLOW THE SIMPLIFIED LIQUIDATION PROCESS  

A creditor of a company may, within 20 business days after the day on which a triggering event in relation to the company occurs, give the liquidator of the company notice in writing requesting the liquidator not to follow the simplified liquidation process in relation to the company.

SECTION 500AC   LIQUIDATOR MUST CEASE TO FOLLOW THE SIMPLIFIED LIQUIDATION PROCESS  

500AC(1)    
The liquidator of a company must cease to follow the simplified liquidation process:

(a)    if the eligibility criteria for the simplified liquidation process are no longer met in relation to a company; or

(b)    in other circumstances prescribed by the regulations.

500AC(2)    
The regulations may deal with the transition from a simplified liquidation process to another process under this Chapter.

500AC(3)    
Without limiting subsection (2), regulations made for the purposes of that subsection may deal with:

(a)    proofs of debts and claims in relation to a company that has ceased to be subject to the simplified liquidation process; and

(b)    ranking debts and claims in relation to a company that has ceased to be subject to the simplified liquidation process; and

(c)    the identification of contributories in relation to a company that has ceased to be the subject of the simplified liquidation process; and

(d)    the declaration and payment of a dividend in the winding up of a company that has ceased to be the subject of the simplified liquidation process; and

(e)    giving information, providing reports and producing documents to ASIC in relation to a company that has ceased to be the subject of the simplified liquidation process.

500AC(4)    
Regulations made for the purposes of subsection (2) may provide that this Act has effect with any modifications prescribed by the regulations.

SECTION 500AD  

500AD   WORKING OUT WHETHER THE 25% IN VALUE OF CREDITORS TEST MET  

For the purposes of paragraph 500A(2)(c) :

(a)    the value of the creditors at a particular time is to be worked out by reference to the value of the creditors ' claims against the company that are known at that time; and

(b)    the regulations may prescribe creditors that are, or are not, to be taken into account.

SECTION 500AE   SIMPLIFIED LIQUIDATION PROCESS  

500AE(1)    
The simplified liquidation process for a creditors ' voluntary winding up is the process for a creditors ' voluntary winding up set out in this Act, as affected by:

(a)    subsection (2); and

(b)    regulations made for the purposes of subsection (3).

500AE(2)    
The following provisions do not apply in the simplified liquidation process:

(a)    section 533 ;

(b)    section 75-10 of Schedule 2 (external administrator may convene meetings);

(c)    section 75-15 of Schedule 2 (external administrator must convene meeting in certain circumstances);

(d)    section 75-20 of Schedule 2 (external administrator must convene meeting if required by ASIC);

(e)    Division 80 of Schedule 2 (committees of inspection);

(f)    subsections 90-23(1) to (5) and section 90-24 of Schedule 2 (appointment of reviewing liquidator by ASIC, creditors etc.).

500AE(3)    
The regulations may provide for and in relation to the following:

(a)    circumstances in which a transaction is not an unfair preference despite section 588FA ;

(b)    circumstances in which a transaction is not voidable despite section 588FE ;

(c)    proofs of debts and claims in relation to a company that is subject to the simplified liquidation process, including:

(i) the preparation and content of formal and informal proofs of debts and claims in relation to the company; and

(ii) the submission of formal and informal proofs of debts and claims to the liquidator of the company; and

(iii) the production of documents and information relating to proofs of debts and claims to the liquidator of the company; and

(iv) withdrawal and variation of proofs of debts and claims in relation to the company; and

(v) the admission and rejection of formal and informal proofs of debts and claims in relation to the company;

(d)    the identification of contributories in relation to a company that is the subject of the simplified liquidation process;

(e)    the declaration and payment of a dividend in the winding up of a company that is the subject of the simplified liquidation process;

(f)    giving information, providing reports and producing documents to ASIC in relation to a company that is the subject of the simplified liquidation process.

Division 4 - Voluntary winding up generally  

SECTION 501  

501   DISTRIBUTION OF PROPERTY OF COMPANY  
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.

SECTION 502  

502   APPOINTMENT OF LIQUIDATOR  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 165] (effective 1 March 2017).)

SECTION 503  

503   REMOVAL OF LIQUIDATOR  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 165] (effective 1 March 2017).)

SECTION 504  

504   REVIEW OF LIQUIDATOR ' S REMUNERATION  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 165] (effective 1 March 2017).)

SECTION 505  

505   ACTS OF LIQUIDATOR VALID ETC.  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 165] (effective 1 March 2017).)

SECTION 506   POWERS AND DUTIES OF LIQUIDATOR  

506(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.

(f) (Repealed)

506(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 ; and

(c)    

in the case of a simplified liquidation process - a reference in those subsections to a resolution of the creditors were a reference to a resolution passed by the creditors without a meeting in the circumstances prescribed under paragraph 75-40(5)(b) of Schedule 2 .

506(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.

506(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.

506(3)    
The liquidator must pay the debts of the company and adjust the rights of the contributories among themselves.

506(4)    
(Repealed by No 132 of 2007, s 3, Sch 1, Pt 3 [ 113].)

SECTION 506A   DECLARATIONS BY LIQUIDATOR - RELEVANT RELATIONSHIPS AND INDEMNITIES  

Scope

506A(1)    
This section applies to a liquidator appointed in relation to a creditors ' voluntary winding up.

Declaration and notification of relevant relationships and indemnities

506A(2)    
Within 10 business days after the day of the meeting of the company at which the resolution for voluntary winding up is passed, the liquidator must:

(a)    make:

(i) a declaration of relevant relationships; and

(ii) a declaration of indemnities; and

(b)    give a copy of each declaration to as many of the company ' s creditors as reasonably practicable.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

506A(3)    

As soon as practicable after making a declaration under subsection (2) , the liquidator must lodge a copy of the declaration with ASIC.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

Replacement declarations

506A(4)    
If:

(a)    at a particular time, the liquidator makes:

(i) a declaration of relevant relationships; or

(ii) a declaration of indemnities;

under subsection (2) of this section; and

(b)    at a later time:

(i) the declaration has become out-of-date; or

(ii) the liquidator becomes aware of an error in the declaration;

the liquidator must, as soon as practicable, make:

(c)    if subparagraph (a)(i) applies - a replacement declaration of relevant relationships; or

(d)    if subparagraph (a)(ii) applies - a replacement declaration of indemnities.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

506A(5)    
The liquidator must table a copy of a replacement declaration under subsection (4) :

(a)    if:

(i) there is a committee of inspection; and

(ii) the next meeting of the committee of inspection occurs before the next meeting of the company ' s creditors;

at the next meeting of the committee of inspection; or

(b)    in any other case - at the next meeting of the company ' s creditors.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

506A(6)    

As soon as practicable after making a replacement declaration under subsection (4) , the liquidator must lodge a copy of the replacement declaration with ASIC.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

506A(7)    
In a prosecution for an offence constituted by a failure to include a matter in a declaration under this section, it is a defence if the defendant proves that:

(a)    the defendant made reasonable enquiries; and

(b)    after making these enquiries, the defendant had no reasonable grounds for believing that the matter should have been included in the declaration.

SECTION 507   POWER OF LIQUIDATOR TO ACCEPT SHARES ETC. AS CONSIDERATION FOR SALE OF PROPERTY OF COMPANY  

507(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.

507(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.

507(3)    
A transfer, sale or arrangement under this section is binding on the members of the company.

507(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.

507(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.

507(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.

507(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.

507(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.

507(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.

507(9)    
The Court may give any directions necessary for the initiationand conduct of the arbitration and any such direction is binding on the parties.

507(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.

507(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.

SECTION 508  

508   ANNUAL OBLIGATIONS OF LIQUIDATOR - MEETING OR REPORT  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 168] (effective 1 March 2017).)

SECTION 509   DEREGISTRATION  
ASIC must deregister at the end of 3 month period

509(1)    
If an end of administration return for a company is lodged with ASIC on the basis that the affairs of the company are fully wound up, ASIC must deregister the company at the end of the period of 3 months beginning on the day after the return is lodged (the deregistration period ).

ASIC must deregister on a day specified by the Court

509(2)    

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 deregistration period.

509(3)    
The person on whose application an order under subsection (2) is made must, within 10 business days after the making of the order, lodge a copy of the order.

SECTION 510   ARRANGEMENT: WHEN BINDING ON CREDITORS  

510(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.

510(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.

510(2)    

A creditor must be accounted a creditor for value for such sum as upon an account fairly stated, after allowing the value of any security interests 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.

510(3)    

A dispute about the value of any such security interest 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.

510(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.

SECTION 511  

511   APPLICATION TO COURT TO HAVE QUESTIONS DETERMINED OR POWERS EXERCISED  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 170] (effective 1 March 2017).)

SECTION 512  

512   COSTS  

(Repealed by No 132 of 2007, s 3, Sch 5 [ 7] (effective 31 December 2007).)