CORPORATIONS ACT 2001

CHAPTER 2D - OFFICERS AND EMPLOYEES  

PART 2D.1 - DUTIES AND POWERS  

Division 5 - Exercise of powers while company under external administration  

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: 30 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 .


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