Melbourne Law School - Theses

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Insolvent trading under the corporations law: the amending insolvent trading legislation introduced by the Corporate Law Reform Act 1992 addresses the major inadequacies of its predecessor, but also leaves a number of issues unresolved

Coburn, Niall F. ( 1996)

The Corporate Law Reform Act (1992) (Cwth) (the Act) received Royal Assent on 24 December 1992. The provisions of the Act became operative in two stages: Parts 2, 3, 6 and 7 commenced on 1 February 1993 and Parts 4 and 5 commenced on 23 June 1993. The Act introduced a new insolvent trading regime into the Corporations Law replacing s 592 and related provisions. The new regime introduced significant changes to the Corporations Law (Law). Some of the main features are; imposing on directors a duty to prevent the company from engaging in insolvent trading, implementation of new statutory defences, introduction of provisions that relate to holding companies, decriminalisation of the insolvent trading provision and civil penalty orders for contravention of 588G in the absence of dishonest intent, new criminal proceedings for contravening 588G in circumstances of dishonesty, liquidators standing to take proceedings and power given to the court to make compensation orders for liquidators and creditors. (from introduction)