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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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