SCHEDULE 2
-
INSOLVENCY PRACTICE SCHEDULE (CORPORATIONS)
Note: See section
600K
.
PART 1
-
INTRODUCTION
Division 1
-
Introduction
CLAUSE 1-1
OBJECT OF THIS SCHEDULE
1-1(1)
The object of this Schedule is to ensure that any person registered as a liquidator:
(a)
has an appropriate level of expertise; and
(b)
behaves ethically; and
(c)
maintains sufficient insurance to cover his or her liabilities in practising as a registered liquidator.
1-1(2)
The object of this Schedule is also:
(a)
to regulate the external administration of companies consistently, unless there is a clear reason to treat a matter that arises in relation to a particular kind of external administration differently; and
(b)
to regulate the external administration of companies to give greater control to creditors.
CLAUSE 1-5
SIMPLIFIED OUTLINE OF THIS SCHEDULE
Registering liquidators
Under this Act, only a registered liquidator can perform certain roles, such as that of the receiver of the property of a corporation, the administrator of a company or of a deed of company arrangement, the restructuring practitioner for a company or for a restructuring plan, or the liquidator or provisional liquidator of a company.
Part 2 of this Schedule sets out the process for registering liquidators, and also deals with disciplining registered liquidators.
Consistently regulating the external administration of companies
Part 3 of this Schedule sets out provisions to regulate the external administration of companies consistently.
A company is under external administration if the company is under administration, is the subject of a deed of company arrangement, is under restructuring, is the subject of a restructuring plan or has had a liquidator or provisional liquidator appointed in relation to it. A company is not under external administration merely because a person has been appointed as a receiver, receiver and manager or other controller in relation to the property of the company.
Other provisions
There are other matters relevant to the external administration of a company regulated in Chapter
5
.
This Schedule also gives authority for a legislative instrument, the Insolvency Practice Rules, to deal with some matters.
Many of the terms in this Schedule are defined. The Dictionary in section 5-5 contains a list of every term that is defined in this Schedule. Other terms are defined in section
9
of this Act.
History
Cl 1-5 amended by No 130 of 2020, s 3, Sch 1[86] and
[
87] (effective 1 January 2021).
Division 5
-
Definitions
Subdivision A
-
Introduction
CLAUSE 5-1
SIMPLIFIED OUTLINE OF THIS DIVISION
Terms used in this Schedule are defined in the Dictionary. In some cases, the definition is a signpost to another provision of the Schedule in which the meaning of the term is explained.
Some of the key terms, the meaning of which is explained in this Division, are external administration of a company and external administrator of a company.
Subdivision B
-
The Dictionary
CLAUSE 5-5
5-5
THE DICTIONARY
Note: A number of expressions used in this Schedule are defined in section
9
of this Act.
In this Schedule:
adequate and appropriate fidelity insurance
has a meaning affected by subsection
25-1(2)
.
adequate and appropriate professional indemnity insurance
has a meaning affected by subsection
25-1(2)
.
administration account
: see section
65-5
.
annual administration return
means the return required to be lodged under subsection
70-5(3)
.
annual liquidator return
means the return required to be lodged under subsection
30-1(1)
.
approved form
: a document is lodged in the
approved form
if it is lodged in accordance with section
100-6
.
committee of inspection
for a company means:
(a)
a committee appointed under sections
80-10
to
80-25
in relation to the external administration of the company; or
(b)
a committee that is taken to be a committee of inspection in relation to the external administration of the company under subsection
80-26(3)
(the company is a member of a pooled group).
creditor
, when used in relation to a company under external administration, means a creditor of the company.
current conditions
: see section
5-10
.
end of administration return
means the return required to be lodged under subsection
70-6(2)
.
end of an external administration
of a company means:
(a)
in relation to a company under administration
-
the day worked out under paragraph
435C(1)(b)
; and
(b)
in relation to a company subject to a deed of company arrangement
-
the day the deed is terminated; and
(ba)
in relation to a company under restructuring
-
the day worked out under regulations made for the purposes of paragraph
453A(b)
; and
(bb)
in relation to a company subject to a restructuring plan
-
the day the plan is terminated; and
(c)
in the case of a winding up of a company
-
the day on which the affairs of the company are fully wound up.
History
Definition of
end of an external administration
amended by No 130 of 2020, s 3, Sch 1[88] (effective 1 January 2021).
external administration
of a company: see section
5-15
.
external administrator
of a company: see section
5-20
.
financial interest
: a person has a
financial interest
in the external administration of a company in the circumstances set out in section
5-30
.
GST
has the same meaning as in the
A New Tax System (Goods and Services Tax) Act 1999
.
Insolvency Practice Rules
means the rules made by the Minister under section
105-1
.
Insolvency Practice Schedule (Bankruptcy)
means Schedule 2 to the
Bankruptcy Act 1966
, and includes rules made under section 105-1 of that Schedule.
March quarter
means the period of 3 months beginning on 1 January.
maximum default amount
for an external administrator of a company: see section
60-15
.
member of a pooled group
: see section
5-27
.
pooled group
: see section
5-27
.
prescribed
means prescribed by the Insolvency Practice Rules.
property
has a meaning affected by section
5-26
.
registered liquidator
means an individual who is registered as a liquidator under Part
2
of this Schedule.
Register of Liquidators
means the register established and maintained by ASIC under section
15-1
.
[
CCH Note:
Definition of
"
Register of Liquidators
"
will be repealed by No 69 of 2020, s 3, Sch 1[1316] (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
related entity
, in relation to an individual, has the same meaning as in the
Bankruptcy Act 1966
.
remuneration determination
, for an external administrator of a company, means a determination made in accordance with section
60-10
in relation to the external administrator.
resolution
: a
resolution
is passed by creditors or contributories of a company:
(a)
in a meeting
-
in the circumstances prescribed under paragraph
75-50(2)(k)
; or
(b)
without a meeting
-
in the circumstances prescribed under paragraph
75-40(5)(b)
.
reviewing liquidator
means a registered liquidator who has been appointed under section
90-23
or
90-24
to conduct a review.
special resolution
: a
special resolution
is passed by creditors or contributories of a company:
(a)
in a meeting
-
in the circumstances prescribed under paragraph
75-50(2)(k)
; or
(b)
without a meeting
-
in the circumstances prescribed under paragraph
75-40(5)(b)
.
start of an external administration
of a company means:
(a)
in relation to a company under administration
-
the day an administrator of the company is appointed under section
436A
,
436B
or
436C
; and
(b)
in relation to a company that is subject to a deed of company arrangement
-
the day the deed is executed; and
(ba)
in relation to a company under restructuring
-
the day a restructuring practitioner for the company is appointed under section
453B
; and
(bb)
in relation to a company that is subject to a restructuring plan
-
the day the plan is made; and
(c)
in the case of a winding up of a company
-
the day the winding up of the company is taken to have begun under section
513A
or
513B
; and
(d)
in relation to a company for which a provisional liquidator has been appointed
-
the day the provisional liquidator is appointed.
History
Definition of
start of an external administration
amended by No 130 of 2020, s 3, Sch 1[89] (effective 1 January 2021).
this Schedule
includes the Insolvency Practice Rules.
History
Cl 5-5 amended by No 76 of 2023, s 3, Sch 2[6] (effective 20 October 2023).
Subdivision C
-
Other definitions
CLAUSE 5-10
MEANING OF
CURRENT CONDITIONS
5-10(1)
Each of the following is a
current condition
imposed on a registered liquidator:
(a)
a condition that a committee decides that the registered liquidator is to be subject to under subsection
20-20(5)
or
(6)
, subject to any variation that a committee has decided should be made to the condition under section
20-55
;
(b)
a condition imposed on all registered liquidators, or on registered liquidators of the liquidator
'
s class, under section
20-35
;
(c)
a condition imposed under subsection
40-15(2)
(direction not to accept further appointments);
(d)
a condition that a committee decides that the registered liquidator is to be subject to under paragraph
40-55(1)(f)
or (g) (conditions as a result of disciplinary action), subject to any variation that a committee has decided should be made to the condition under section
20-55
;
(e)
a condition imposed on the registered liquidator by the Court under section
45-1
.
5-10(2)
However, the
current conditions
imposed on a registered liquidator do not include:
(a)
a condition that a committee has decided to remove under section
20-55
; or
(b)
a condition that is removed under subsection
40-15(4)
(condition removed because a direction not to accept further appointments has been withdrawn); or
(c)
a condition that the Court has ordered be removed under section
45-1
.
CLAUSE 5-15
5-15
MEANING OF
EXTERNAL ADMINISTRATION
OF A COMPANY
A company is taken to be under
external administration
if:
(a)
the company is under administration; or
(b)
a deed of company arrangement has been entered into in relation to the company; or
(ba)
the company is under restructuring; or
(bb)
a restructuring plan has been made in relation to the company; or
(c)
a liquidator has been appointed in relation to the company; or
(d)
a provisional liquidator has been appointed in relation to the company.
Note: A company is not under
external administration
for the purposes of this Schedule merely because a receiver, receiver and manager, or other controller has been appointed in relation to property of the company.
History
Cl 5-15 amended by No 130 of 2020, s 3, Sch 1[90] (effective 1 January 2021).
CLAUSE 5-20
5-20
MEANING OF
EXTERNAL ADMINISTRATOR
OF A COMPANY
A person is an
external administrator
of a company if the person is:
(a)
the administrator of the company; or
(b)
the administrator under a deed of company arrangement that has been entered into in relation to the company; or
(ba)
the restructuring practitioner for the company; or
(bb)
the restructuring practitioner for a restructuring plan that has been made in relation to the company; or
(c)
the liquidator of the company; or
(d)
the provisional liquidator of the company.
Note: A person is not an
external administrator
of a company for the purposes of this Schedule merely because the person has been appointed as a receiver, receiver and manager, or controller in relation to property of the company.
History
Cl 5-20 amended by No 130 of 2020, s 3, Sch 1[91] (effective 1 January 2021).
CLAUSE 5-25
5-25
REFERENCES TO THE EXTERNAL ADMINISTRATOR OF A COMPANY
A reference in this Schedule to the external administrator of a company is to be read:
(a)
in relation to a company in respect of which there are 2 or more joint external administrators
-
as a reference to all of the external administrators; and
(b)
in relation to a company in respect of which there are 2 or more joint and several external administrators
-
as a reference to all of the external administrators or any one or more of the external administrators.
CLAUSE 5-26
5-26
PROPERTY OF A COMPANY
The
property
of a company includes any PPSA retention of title property of the company.
Note: See sections
9
(definition of
property
) and
51F
(PPSA retention of title property).
CLAUSE 5-27
5-27
MEANING OF
POOLED GROUP
If:
(a)
a pooling determination is in force in relation to a group of 2 or more companies; or
(b)
a pooling order is in force in relation to a group of 2 or more companies;
then:
(c)
the companies are together a
pooled group
; and
(d)
each of the companies is a
member of the pooled group
.
CLAUSE 5-30
5-30
PERSONS WITH A
FINANCIAL INTEREST
IN THE EXTERNAL ADMINISTRATION OF A COMPANY
A person has a
financial interest
in the external administration of a company:
(a)
if the person is one of the following:
(i)
the company;
(ii)
a creditor of the company;
(iii)
an external administrator of the company;
(iv)
in a members
'
voluntary winding up
-
a member of the company; or
(b)
in any other circumstances prescribed.
