Commonwealth Consolidated Acts

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When holding company liable

  (1)   A corporation contravenes this section if:

  (a)   the corporation is the holding company of a company at the time when the company incurs a debt; and

  (b)   the company is insolvent at that time, or becomes insolvent by incurring that debt, or by incurring at that time debts including that debt; and

  (c)   at that time, there are reasonable grounds for suspecting that the company is insolvent, or would so become insolvent, as the case may be; and

  (d)   one or both of the following subparagraphs applies:

  (i)   the corporation, or one or more of its directors, is or are aware at that time that there are such grounds for so suspecting;

  (ii)   having regard to the nature and extent of the corporation's control over the company's affairs and to any other relevant circumstances, it is reasonable to expect that:

  (A)   a holding company in the corporation's circumstances would be so aware; or

  (B)   one or more of such a holding company's directors would be so aware; and

  (e)   that time is at or after the commencement of this Act.

  (2)   A corporation that contravenes this section is not guilty of an offence.

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