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CORPORATIONS ACT 2001 - SECT 198G

Exercise of powers while company under external administration

Powers of officers while company under external administration

             (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

             (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

             (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 .

             (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

             (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

             (6)  This section does not remove an officer of a company from office.

             (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.

             (8)  Nothing in this section affects a secured creditor's right to realise or otherwise deal with the security interest.

Definitions

             (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.



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