Insolvency Law Reform Act 2016 (11 of 2016)

Schedule 2   Amendments relating to the Insolvency Practice Schedule (Corporations)

Part 2   Amendments consequential on the introduction of the Insolvency Practice Schedule (Corporations)

Corporations Act 2001

167   Section 506A

Repeal the section, substitute:

506A Declarations by liquidator - relevant relationships and indemnities

Scope

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

Declaration and notification of relevant relationships and indemnities

(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)).

Replacement declarations

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(i) the declaration has become out-of-date; or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

(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)).

(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.