Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 436

436. (1) Where it is resolved by the majority of the directors of a company
present at a meeting of the directors specially convened for the purpose that
the company is unable to pay its debts as and when they become due and
payable, the company may, or, where the company is requested in writing to do
so by a creditor of the company who has a judgment against the company
unsatisfied to the extent of at least $1,000, the company shall, convene a
meeting of its creditors in accordance with this section for the purpose of
placing the company under official management and appointing an official
manager of the company.

(2) A meeting of creditors of a company for the purposes of this section shall
be convened by giving notice of the meeting in accordance with this section to
the creditors of the company.

(3) The notice referred to in subsection (2) shall be given by the company
within:

   (a)  35 days after the passing of the resolution, or the receipt by the
        company of the request, referred to in subsection (1); or

   (b)  such further period as the Commission allows where, in the opinion of
        the Commission, the company would not be able to give the notice
        within the time specified in paragraph (a).

(4) The company shall, at least 7 days before the end of the period within
which the notice referred to in subsection (2) is required to be given,
prepare a report in the prescribed form as to the affairs of the company made
up to a date not earlier than the date of the passing of the resolution, or
the receipt by the company of the request, referred to in subsection (1).

(5) Each director of the company shall furnish to the company a certificate
under his or her hand certifying whether the report prepared in accordance
with subsection (4) does or does not, to the best of his or her knowledge,
information and belief, give a true and fair view of the state of affairs of
the company as at the date to which it is made up and, subject to subsection
(8), a company shall be deemed to have failed to comply with subsection (4)
unless each director has furnished to the company such a certificate.

(6) Where a director certifies that to the best of his or her knowledge,
information and belief the report does not give a true and fair view of the
state of affairs of the company, the director shall also state in the
certificate the grounds on which he or she formed that opinion.

(7) A director of a company shall not furnish a certificate under subsection
(5) concerning a report prepared in accordance with subsection (4) unless he
or she has made such enquiries as are reasonably necessary to determine
whether the report does or does not give a true and fair view of the state of
affairs of the company as at the date to which is made up.

(8) Where the Commission is satisfied that it is impracticable for a company
to obtain the certificate referred to in subsection (5) from a director of the
company, the Commission may exempt the company from the obligation to obtain
the certificate from that director.

(9) For the purposes of subsection (2), notice of a meeting of creditors of a
company shall be given by:

   (a)  sending by post to each of the creditors a notice, in the prescribed
        form; and

   (b)  publishing a copy of that notice in each State, Territory or excluded
        Territory in which the company carries on business or has carried on
        business at any time during the 2 years immediately preceding the
        passing of the resolution, or the receipt by the company of the
        request, referred to in subsection (1), in a daily newspaper
        circulating generally in that State, Territory or excluded Territory,
        as the case may be; not less than 7 days, nor more than 14 days,
        before the day fixed for the holding of the meeting.

(10) Subject to subsection (11), the company shall attach to every notice
posted in accordance with subsection (9):

   (a)  a summary of the affairs of the company, in the prescribed form;

   (b)  a notice that the report that the company is required by subsection
        (4) to prepare is available for inspection at the registered office of
        the company and that a copy of the report will be sent by post to any
        creditor who makes a request in writing for a copy of the report or
        will be delivered to any creditor who attends at the registered office
        of the company and requests a copy; and

   (c)  a copy of each certificate furnished by a director of the company in
        accordance with subsection (5).

(11) The company may attach to a notice posted in accordance with subsection
(9) a copy of the report prepared in accordance with subsection (4) and, where
it so attaches a copy of that report, the company is not required to attach
the summary and notice referred to in paragraphs (10) (a) and (b).

(12) A meeting of creditors convened under this section shall be convened for
a day, time and place convenient to the majority in value of the creditors.

(13) The creditors of the company present at the meeting who are entitled to
vote on a special resolution moved at the meeting shall appoint a chairman of
the meeting.

(14) The chairman so appointed shall at the meeting determine whether the day,
time and place of the meeting are convenient to the majority in value of the
creditors, and his or her decision is final.

(15) Within 7 days after the first notice convening the meeting is posted to
any creditor, the company shall lodge with the Commission a copy of that
notice and shall attach to the copy a certified copy of the report required to
be prepared by the company under subsection (4) and a certified copy of each
of the certificates furnished by the directors under subsection (5).

(16) If a company fails to comply with subsection (1), (4), (10) or (15), or a
request referred to in paragraph (10) (b), the company is, notwithstanding
section 1311, not guilty of an offence against this Act but any officer of the
company who is in default is guilty of an offence.

(17) Any director of a company who fails to take all reasonable steps to
secure compliance by the company with subsection (4) is guilty of an offence.

(18) A director who contravenes, or fails to comply with, subsection (5), (6)
or (7) is guilty of an offence.