Commonwealth Numbered Acts

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CORPORATIONS ACT 2001 No. 50, 2001 - SECT 588V

When holding company liable

(1) A corporation contravenes this section if:

(a)
the corporation is the holding company of a company at the time when the company incurs a debt; and

(b)
the company is insolvent at that time, or becomes insolvent by incurring that debt, or by incurring at that time debts including that debt; and

(c)
at that time, there are reasonable grounds for suspecting that the company is insolvent, or would so become insolvent, as the case may be; and

(d)
one or both of the following subparagraphs applies:

(i)
the corporation, or one or more of its directors, is or are aware at that time that there are such grounds for so suspecting;
(ii)
having regard to the nature and extent of the corporation's control over the company's affairs and to any other relevant circumstances, it is reasonable to expect that:

(A) a holding company in the corporation's circumstances would be so aware; or (B) one or more of such a holding company's directors would be so aware; and

(e)
that time is at or after the commencement of this Act.

(2) A corporation that contravenes this section is not guilty of an offence.



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