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Small business law reform

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The proposed revised Close Corporations Act 1989 would be publicly examined by the Joint Parliamentary Committee on Corporations and Securities, the Attorney-General, Michael Duffy announced today.

Mr Duffy said he had recently written to the Chairman of the Committee, Senator Michael Beahan,agreeing to the Committee undertaking the task. "Australia's small business sector should particularly welcome the opportunity to appear before the Parliamentary Committee," Mr Duffy said.

"Last year the Ministerial Council for Corporations approved the Commonwealth proposal that the Close Corporations Act be revised to overcome its present Constitutional problems and fit into the legislative

framework of the new national corporations scheme. "With the enactment of three major Corporations Law Amendment Bills in 1991, the release of the Corporate Law Reform Bill and the substantial work undertaken on proposals for a continuous disclosure regime, the time is opportune for the committee to reĀ­ examine the Close Corporations legislation."

Mr Duffy said earlier this year he had asked for the bill to be revised so it was constitutionally valid. The bill would normally be released for public comment for three months before introduction to the Parliament.

"It is clear however that there is a lot of interest in this initiative, especially from small business, and I consider it is important for it to be closely examined as there was only a limited time

available for discussion in 1989." Mr Duffy said the degree of regulation for small business needed to be addresed. "The aim of the legislation is to provide a simplified form of business association aimed at the needs of small business."

Mr Duffy said Senator Beahan's Committee is well placed to examine a number of key issues such as: . whether there was a need for both exempt proprietary companies and close corporations.

. criticism of the situation where members of a close corporation could lose the benefits of limited liability and become personally liable for debts. . and the procedure for funding the

liquidation of insolvent close coporations.

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