What are your responsibilities if there is a change to your company’s registered office?

The Corporations Act 2001 (Cth) (the Act) sets out an exhaustive (and even onerous) list of duties for Australian registered companies and their directors. Among these is the duty to notify the Australia Securities and Investment Commission (ASIC) of a change to the company’s registered office. This must be done within 28 days of the change in location.

Introduction

In the latest episode in one of Australia's most complex and lengthy commercial disputes, the Western Australia Court of Appeal recently dismissed an appeal by a syndicate of banks (the Banks) from a decision in favour of the liquidators of the Bell Group (the Group): Westpac Banking Corporation v The Bell Group Limited (in liquidation) [No 3] [2012] WASCA 157.

While the winding up of a company is a last resort in the context of shareholder oppression, the discretion to order a winding up will be exercised by the Courts if the circumstances dictate that it is the most appropriate remedy, such as where it will provide finality and certainty for the shareholders without undermining the value of the company’s projects to a potential purchaser on winding up.

Following the 2011/2012 Federal Budget announcement that directors will be made personally liable for any unpaid superannuation guarantee contributions, Treasury has released the Tax Laws Amendment (2011 Measures No. 7) Bill 2011 (Bill).

The legislation extends the current director penalty regime for unpaid PAYG. Whilst the announcement from Bill Shorten MP on 5 July 2011 highlights the need to prevent companies engaging in phoenix activities, the legislation will have a much broader impact.

Our clients must be sick to death about hearing us comment on the Australian Sons of Gwalia saga (which we have been doing for more than three years) but finally there is good news to report. The short version of the saga is thatSons of Gwalia was a decision by Australia's highest court that shareholder damages claims should be treated as pari passu unsecured claims in an Australian insolvency proceeding.

Under section 449E(2) of the Corporations Act 2001 (Cth), the Court may review the remuneration of the administrator of a company on the application of the administrator. In the recent decision of Paul’s Retail Pty Ltd v Morgan, the New South Wales Court of Appeal considered the issue of whether an administrator could be precluded from access to the abovementioned statutory provision for the review by the Court of remuneration already determined.

The Facts

Introduction

On 26 November 2010, the Federal Parliament passed the Corporations Amendment (Sons of Gwalia) Bill 2010 (“Bill”). The Bill amends section 563A of the Corporations Act 2001 (Cth) (“Act”) such that any claim brought by a person against a company that arises from the buying, selling, holding or other dealing with a shareholding will be postponed in an external administration until all other claims have been paid. The Bill has the effect of reversing the High Court decision of Sons of Gwalia v Margaretic [2007] HCA 1.

The Government has passed amendments to the Corporations Act 2001 (Cth) and the Corporations Regulations 2001 (Regulations) to overturn the impact of the decision in Sons of Gwalia v Margaretic (2007) 231 CLR 160 (Sons of Gwalia) and reinstate the longheld convention that creditors’ rights take precedence over shareholders’ rights in the instance of a winding up.

What was the outcome of Sons of Gwalia?

Law clerk, Myles Engelen, discusses the decision of the Supreme Court of New South Wales, in McGrath & Anor re HIH Insurance Ltd approving a proposal to use excess assets of some members of the group to fund claims by the group members.

Key Points: An administrator of a deed of company arrangement has been allowed to sell the company over a shareholder's objections.

The GFC has seen a significant rise in the number of corporate insolvencies.[1]

Many of those insolvencies have been the result of tighter credit, rather than a collapse of the company's business. It's no surprise, therefore, that there is a major appetite for the acquisition of distressed businesses and companies.