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Corporations (Aboriginal and Torres Strait Islander) Bill 2006

Part 11-6 Insolvent trading

Division 531 Insolvent trading

531-1   Applying Corporations Act insolvent trading provisions to Aboriginal and Torres Strait Islander corporations

             (1)  The Corporations Act insolvent trading 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

a dividend

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

3

civil penalty order

civil penalty order (within the meaning of this Act)

4

civil penalty provision

civil penalty provision (within the meaning of this Act)

Note:          Although section 526-35 applies the provisions of Part 5.7B to the winding up of an Aboriginal and Torres Strait Islander corporation, the insolvent trading provisions are capable of applying independently of there being a winding up. This section ensures, for example, that a director of an Aboriginal and Torres Strait Islander corporation commits an offence if the corporation trades while insolvent (regardless of whether winding up proceedings are ever commenced).

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

             (3)  In this Act:

Corporations Act insolvent trading provisions means:

                     (a)  Divisions 3, 4, 5 and 6 of Part 5.7B 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 Divisions referred to in paragraph (a); and

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

531-5   Section 588G of Corporations Act prevails over conflicting Native Title legislation obligations

             (1)  In the event of a conflict between:

                     (a)  the duty of a director of an Aboriginal and Torres Strait Islander corporation to ensure that the corporation comply with its Native Title legislation obligations; and

                     (b)  the director’s duty in relation to the corporation under section 588G of the Corporations Act as applied by section 531-1 of this Act;

the director’s duty under section 588G of the Corporations Act as so applied prevails, and the director is released from the first-mentioned duty, to the extent of the conflict.

             (2)  The corporation is released from the duty to comply with its Native Title legislation obligations to the extent that complying with them would place a director of the corporation in breach of his or her duty in relation to the corporation under section 588G of the Corporations Act as so applied.