Corporations Act 2001
[ CCH Note: Regulation 10.25.02(3)(f) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[84] apply in relation to external administrations on and after 1 September 2017.]
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
of a company has the same meaning as in Schedule
2
.
external administrator
of a company has the same meaning as in Schedule
2
.
[ CCH Note: Regulation 10.25.02(3)(f) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[84] apply in relation to external administrations on and after 1 September 2017.]
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