THE CORPORATIONS LAW

CHAPTER 5 - EXTERNAL ADMINISTRATION

PART 5.5 - VOLUNTARY WINDING UP

Division 2 - Members' voluntary winding up

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

496(1)  [Required courses of action]  

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)  [List to accompany notice]  

The liquidator shall 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.

496(3)  [Creditors whose debts do not exceed $200]  

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 shall 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 shall as soon as practicable comply with the request.

496(4)  [Statement of assets and liabilities]  

The liquidator shall lay before the meeting a statement of the assets and liabilities of the company and the notice convening the meeting shall draw the attention of the creditors to the right conferred upon them by subsection (5).

496(5)  [Creditors may appoint new liquidator]  

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)  [Effect of appointment]  

If the creditors appoint some other person under subsection (5), the winding up shall thereafter proceed as if the winding up were a creditors' voluntary winding up.

496(7)  [Lodgment of notice]  

The liquidator or, if another person is appointed by the creditors to be liquidator, the person so appointed shall, within 7 days after a meeting has been held pursuant to subsection (1), lodge a notice in the prescribed form.

496(8)  [Procedure where new liquidator not appointed]  

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 shall 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.