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Corporations (Aboriginal and Torres Strait Islander) Bill 2006

Part 11-5 Winding up

Division 526 Winding up

526-1   Court may order winding up

             (1)  The Court may order that an Aboriginal and Torres Strait Islander corporation be wound up.

             (2)  The order may only be made on the grounds set out in section 526-5.

             (3)  The order may only be made on an application made in accordance with section 526-15.

526-5   Grounds for Court ordered winding up

                   The following are the grounds on which an Aboriginal and Torres Strait Islander corporation may be wound up:

                     (a)  the corporation has by special resolution resolved that it be wound up by the Court;

                     (b)  the business or operations of the corporation were not commenced within 1 year after its registration or have been suspended for a continuous period of 1 year;

                     (c)  the corporation has ceased to satisfy a requirement for registration imposed by section 141-5, 141-10 or 141-15;

                     (d)  section 26-15 precludes the continued registration of the corporation;

                     (e)  the officers of the corporation have acted in the affairs of the corporation:

                              (i)  in their own interests rather than in the interests of the members of the corporation as a whole; or

                             (ii)  in a way that appears to be unfair or unjust to the members of the corporation;

                      (f)  the affairs of the corporation are being conducted in a way that is:

                              (i)  oppressive; or

                             (ii)  unfairly prejudicial to, or unfairly discriminatory against, a member or members of the corporation; or

                            (iii)  contrary to the interests of the members of the corporation as a whole;

                     (g)  an act or omission, or a proposed act or omission, by or on behalf of the corporation was or would be:

                              (i)  oppressive; or

                             (ii)  unfairly prejudicial to, or unfairly discriminatory against, a member or members of the corporation; or

                            (iii)  contrary to the interests of the members as a whole;

                     (h)  a resolution, or a proposed resolution, of a class of members of the corporation, was or would be:

                              (i)  oppressive; or

                             (ii)  unfairly prejudicial to, or unfairly discriminatory against, a member or members of the corporation; or

                            (iii)  contrary to the interests of the members of the corporation as a whole;

                      (i)  the corporation is insolvent;

                      (j)  the directors of the corporation have failed to comply with a notice that the Registrar has given the directors under section 439-20;

                     (k)  the corporation has failed, for a prescribed period, to lodge any financial or other reports required to be lodged by Part 7-3;

                      (l)  by reason of the complexity or magnitude of the activities of the corporation, it is inappropriate that it continue to be registered under this Act;

                    (m)  the Court is satisfied that it is in the interests of:

                              (i)  the public; or

                             (ii)  the corporation’s members; or

                            (iii)  the corporation’s creditors;

                            that the corporation should be wound up;

                     (n)  the Court is satisfied that it is just and equitable that the corporation be wound up.

526-10   Acts etc. done to comply with Native Title legislation requirement

             (1)  Paragraph 526-5(e) or (f) does not apply to an officer of an Aboriginal and Torres Strait Islander corporation that is a registered native title body corporate merely because of doing (or refraining from doing) a particular act if the officer does (or refrains from doing) the act:

                     (a)  in good faith; and

                     (b)  with the belief that doing (or refraining from doing) the act is necessary to ensure that the corporation complies with a Native Title legislation obligation.

             (2)  Paragraph 526-5(g) does not apply to an act or omission, or a proposed act or omission, by or on behalf of a corporation that is a registered native title body corporate, if the act or omission, or the proposed act or omission, was done:

                     (a)  in good faith; and

                     (b)  with the belief that the doing of the act or omission, or the proposed act or omission, is necessary to ensure that the corporation complies with a Native Title legislation obligation.

             (3)  Paragraph 526-5(h) does not apply to a resolution, or a proposed resolution, of a class of members of a corporation that is a registered native title body corporate, if the resolution, or proposed resolution, was made:

                     (a)  in good faith; and

                     (b)  with the belief that the making of the resolution, or proposed resolution, is necessary to ensure that the corporation complies with a Native Title legislation obligation.

526-15   Who may apply to court for winding up order

             (1)  Any one or more of the following may apply to the Court for an order that an Aboriginal and Torres Strait Islander corporation be wound up:

                     (a)  the corporation;

                     (b)  a creditor of the corporation (even if the creditor is a secured creditor or is only a contingent or prospective creditor);

                     (c)  a member of the corporation;

                     (d)  a director of the corporation;

                     (e)  a contributory of the corporation;

                      (f)  a liquidator, or a provisional liquidator, of the corporation;

                     (g)  a special administrator of the corporation;

                     (h)  the Registrar.

This subsection has effect subject to subsections (2), (3), (4) and (5).

             (2)  The Registrar is the only person who may apply for an order that the corporation be wound up if the grounds on which the winding up is applied for are, or include, grounds referred to in any of the following:

                     (a)  paragraph 526-5(j) (failure to comply with a section 439-20 notice);

                     (b)  paragraph 526-5(k) (failure to lodge reports);

                     (c)  paragraph 526-5(l) (complexity or magnitude of corporation’s activities).

             (3)  If the corporation is under special administration only the Registrar or the special administrator may apply for an order that the corporation be wound up.

             (4)  An application by any of the following, or by persons including any of the following, for an order that the corporation be wound up because it is insolvent may only be made with the leave of the Court:

                     (a)  a person who is a creditor only because of a contingent or prospective debt;

                     (b)  a contributory;

                     (c)  a director;

                     (d)  the Registrar.

             (5)  The court must not hear an application by a person being, or persons including, a contingent or prospective creditor of the corporation for an order to wind up the corporation unless and until:

                     (a)  such security for costs has been given as the Court thinks reasonable; and

                     (b)  a prima facie case for winding up the corporation has been established to the Court’s satisfaction.

             (6)  Except as permitted by this section, a person is not entitled to apply for an order to wind up an Aboriginal and Torres Strait Islander corporation.

526-20   Voluntary winding up

             (1)  Subject to subsection (5), an Aboriginal and Torres Strait Islander corporation may be wound up voluntarily if the members of the corporation in general meeting so resolve by special resolution.

             (2)  An Aboriginal and Torres Strait Islander corporation cannot resolve that it be wound up voluntarily if:

                     (a)  the corporation is under special administration under Part 11-2; or

                     (b)  the Registrar:

                              (i)  has given the corporation a notice under subsection 487-10(1); and

                             (ii)  has not given the corporation a notice under subsection 487-10(5).

             (3)  Paragraph (2)(b) does not apply if the Registrar has consented in writing to the voluntary winding up of the corporation.

             (4)  A consent given by the Registrar under subsection (3) is not a legislative instrument

             (5)  Except with the leave of the Court, an Aboriginal and Torres Strait Islander corporation cannot resolve that it be wound up voluntarily if:

                     (a)  an application has been made to the Court for the corporation to be wound up on the ground that it is insolvent; or

                     (b)  the Court has ordered that the corporation be wound up on the ground that it is insolvent (whether or not the order was made on such an application).

             (6)  If an Aboriginal and Torres Strait Islander corporation passes a resolution for the voluntary winding up of the corporation, the corporation must, within 28 days after the passing of a resolution, lodge with the Registrar:

                     (a)  a notice in the approved form of the passing of the resolution; and

                     (b)  a copy of the resolution.

Penalty:  5 penalty units.

             (7)  Subsection (6) is an offence of strict liability.

Note:          For strict liability , see section 6.1 of the Criminal Code .

             (8)  The Registrar must, within 21 days after the lodging of a notice under subsection (6), publish in the Gazette a notice of the passing of the resolution to which the notice relates.

526-25   Distribution of surplus assets in winding up by Court

             (1)  This section applies if:

                     (a)  surplus assets remain on the winding up of an Aboriginal and Torres Strait Islander corporation; and

                     (b)  the winding up is a winding up by the Court.

             (2)  If the corporation’s constitution includes provisions for the distribution of the surplus assets of the corporation in the event of the corporation’s being wound up, the Court or the liquidator must distribute those assets in accordance with those provisions. This subsection has effect subject to subsection (4).

Note:          The liquidator may have powers in relation to the distribution of the surplus under section 488 of the Corporations Act (as applied by section 526-35 of this Act).

             (3)  If:

                     (a)  the corporation’s constitution does not include provisions for the distribution of the surplus assets of the corporation in the event of the corporation’s being wound up; and

                     (b)  the members of the corporation pass a special resolution relating to the distribution of the surplus assets of the corporation;

the Court or the liquidator must distribute those assets in accordance with that special resolution. This subsection has effect subject to subsection (4).

Note:          The liquidator may have powers in relation to the distribution of the surplus under section 488 of the Corporations Act (as applied by section 526-35 of this Act).

             (4)  If:

                     (a)  a Judge of the Court considers that a distribution of the surplus assets of the corporation in accordance with:

                              (i)  the provisions of the corporation’s constitution in accordance with subsection (2); or

                             (ii)  a special resolution in accordance with subsection (3);

                            would not be just; or

                     (b)  no such provisions exist and such a special resolution has not been passed;

the Judge must make such orders for the distribution of those assets as, having regard to the objects of the corporation, he or she considers just.

526-30   Distribution of surplus assets in voluntary winding up

             (1)  This section applies if:

                     (a)  surplus assets remain on the winding up of an Aboriginal and Torres Strait Islander corporation; and

                     (b)  the winding up is a voluntary winding up.

             (2)  If the corporation’s constitution includes provisions for the distribution of the surplus assets of the corporation in the event of the corporation’s being wound up, the liquidator must distribute those assets in accordance with those provisions. This subsection has effect subject to subsection (5).

             (3)  If:

                     (a)  the corporation’s constitution does not include provisions for the distribution of the surplus assets of the corporation in the event of the corporation’s being wound up; and

                     (b)  the members of the corporation pass a special resolution relating to the distribution of the surplus assets of the corporation;

the liquidator must distribute those assets in accordance with that special resolution. This subsection has effect subject to subsection (5).

             (4)  If:

                     (a)  the liquidator considers that a distribution of the surplus assets of the corporation in accordance with:

                              (i)  the provisions of the corporation’s constitution in accordance with subsection (2); or

                             (ii)  a special resolution in accordance with subsection (3);

                            would not be just; or

                     (b)  no such provisions exist and such a special resolution has not been passed;

the liquidator must apply to a Judge of the Court for an order under subsection (5).

             (5)  If:

                     (a)  the Judge considers that a distribution of the surplus assets of the corporation in accordance with:

                              (i)  the provisions of the corporation’s constitution in accordance with subsection (1); or

                             (ii)  a special resolution in accordance with subsection (2);

                            would not be just; or

                     (b)  no such provisions exist and such a special resolution has not been passed;

the Judge must make such orders for the distribution of those assets as, having regard to the objects of the corporation, he or she considers just.

526-35   Applying Corporations Act winding up provisions to Aboriginal and Torres Strait Islander corporations

             (1)  The Corporations Act winding up provisions apply to the winding up of an Aboriginal and Torres Strait Islander corporation as if the following substitutions were made:

 

Substitutions to be made

Item

For a reference to...

substitute a reference to...

1

a company

an Aboriginal and Torres Strait Islander corporation

2

ASIC

the Registrar

3

section 459P

section 526-15 of this Act

4

a dividend

any distribution by the corporation to its members (whether of capital or income)

5

civil penalty order

civil penalty order (within the meaning of this Act)

6

civil penalty provision

civil penalty provision (within the meaning of this Act)

Note:          Item 4 is relevant to the operation of subsection 588G(1A) of the Corporations Act.

             (2)  The Corporations Act winding up provisions apply to the winding up of an Aboriginal and Torres Strait Islander corporation:

                     (a)  only to the extent to which they are capable of applying to the winding up of an Aboriginal and Torres Strait Islander corporation; and

                     (b)  with the modifications specified in the regulations.

             (3)  In this Act:

Corporations Act winding up provisions means:

                     (a)  Parts 5.4, 5.4B, 5.5, 5.6, 5.7B, 5.8, 5.8A and 5.9 of the Corporations Act; and

                     (b)  the other provisions of that Act (including Parts 1.2 and 9.4 and Schedule 3 but not including Parts 1.1, 1.1A and 9.4A) to the extent to which they relate to the operation of the Parts referred to in paragraph (a); and

                     (c)  the regulations made under that Act for the purposes of the Parts of that Act referred to in paragraph (a) and the provisions referred to in paragraph (b);

but does not include the excluded winding up provisions of that Act.

excluded winding up provisions of the Corporations Act means:

                     (a)  sections 459A of that Act (which deals with the court’s power to order a winding up); and

                     (b)  sections 459B of that Act (which deals with insolvency as a ground for winding up); and

                     (c)  sections 459P of that Act (which deals with who may apply for a winding up on the grounds of insolvency); and

                     (d)  section 490 of that Act (which deals with when a resolution for voluntary winding up may be passed); and

                     (e)  section 491 of that Act (which deal with the resolution for a voluntary winding up).

526-40   Application of Corporations Act pre-winding up provisions

             (1)  The Corporations Act pre-winding up provisions apply to an Aboriginal and Torres Strait Islander corporation as if the following substitutions were made:

 

Substitutions to be made

Item

For a reference to...

substitute a reference to...

1

a company

an Aboriginal and Torres Strait Islander corporation

2

section 459P

section 526-15 of this Act

3

ASIC

the Registrar

4

lodged

lodged with the Registrar

Note:          This section is intended to apply to Aboriginal and Torres Strait Islander corporations some provisions of the Corporations Act that are capable of operating before a winding up commences (or even whether or not a winding up ever occurs). Section 526-35 only applies provisions of the Corporations Act to a winding up of an Aboriginal and Torres Strait Islander corporation.

             (2)  This section has effect without limiting section 526-35.

             (3)  In this Act:

Corporations Act pre-winding up provisions means:

                     (a)  section 459C, Divisions 2 and 3 of Part 5.4 and section 459Q of the Corporations Act; and

                     (b)  section 487 of that Act; and

                     (c)  section 494 of that Act; and

                     (d)  section 570 of that Act; and

                     (e)  Division 9 of Part 5.6 of that Act; and

                      (f)  the other provisions of that Act (including Parts 1.2, 5.8 and 9.4 and Schedule 3 but not including Parts 1.1, 1.1A and 9.4A) to the extent to which they relate to the operation of the provisions referred to in paragraphs (a) to (e); and

                     (g)  the regulations made under that Act for the purposes of the provisions of that Act referred to in paragraphs (a) to (e) and the provisions referred to in paragraph (f).