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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.

Note:   For a CCIV, section   1224Q applies instead of this section.

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 .

  (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

  (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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