Section 496(4), (5), (6), (7) and (8) of the Corporations Act 2001 (Cth) is ‘Duty of Liquidator Where Company Turns Out to Be Insolvent’ and is extracted below.
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Section 496(4), (5), (6), (7) and (8) of the Corporations Act 2001 (Cth) is Duty of Liquidator Where Company Turns Out to Be Insolvent and reads as follows:
Duty of Liquidator Where Company Turns Out to Be Insolvent
(4) The liquidator must lay before the meeting a statement of the assets and liabilities of the company and the notice convening the meeting must draw the attention of the creditors to the right conferred upon them by subsection (5).
(5) The creditors may, at the meeting convened under subsection (1), appoint some other person to be liquidator for the purpose of winding up the affairs and distributing the property of the company instead of the liquidator appointed by the company.
(6) If the creditors appoint some other person under subsection (5), the winding up must thereafter proceed as if the winding up were a creditors’ voluntary winding up.
(7) The liquidator or, if another person is appointed by the creditors to be liquidator, the person so appointed must, within 7 days after a meeting has been held pursuant to subsection (1), lodge a notice in the prescribed form.
(8) After the meeting the winding up must proceed as if it were a creditors’ voluntary winding up.
The maximum penalty for the offence of Duty of Liquidator Where Company Turns Out to Be Insolvent is:
20 penalty units (a Commonwealth penalty unit is currently $210).
However, it should be kept in mind that maximum penalties are reserved for the most serious cases.
Your legal team will be able to advise you of the essential elements the prosecution would need to prove in order to establish the offence, whether those elements are capable of being established in your particular situation, the most effective and efficient way forward and the likely outcome.
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Where issues are found, our lawyers will write to the prosecution asking to have the charges dropped on this basis – often sparing our clients the considerable time and expense associated with defended hearings.
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