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CORPORATIONS ACT 2001

CHAPTER 2D - OFFICERS AND EMPLOYEES  

PART 2D.1 - DUTIES AND POWERS  

Division 5 - Exercise of powers while company under external administration  

[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.]

SECTION 198G  EXERCISE OF POWERS WHILE COMPANY UNDER EXTERNAL ADMINISTRATION  

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.

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: 25 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.

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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