On 11 September 2020, the Companies Office hosted a free webinar to provide more information about the new regulatory regime introduced by the Insolvency Practitioners Regulation Act 2019 that came into force 1 September 2020.
Questions about appointments
Do shareholders still have 10 working days after the liquidation application to appoint a liquidator?
Yes. Shareholders can appoint a liquidator within 10 working days of the company being served with the court’s request to appoint a liquidator as per section 241AA(2) of the Companies Act 1993.
What action will the Registrar take against appointments that continue to be late advertised but are pre-dated 31 August 2020?
In the first instance we educate and inform business entities and other stakeholders of their compliance obligations. We conduct proactive activities that contribute to a higher level of compliance, whether through deterrence, prevention or risk identification and reduction.
Our complaints process is designed to encourage members of the public, creditors, insolvency practitioners and other agencies to make a complaint, or to provide information on potential regulatory breaches. The Registries Enforcement Team will investigate potential breaches and take action where appropriate, for example, for persistent non-compliance.
In regard to the field ‘Appointed by’.... what if the appointment was made by all 10 shareholders. Are all the shareholders’ names required?
This question relates to the new information required for the notice of appointment (under section 255(2)(a)(i) of the Companies Act 1993.
We can confirm that where an appointment has been made by a special resolution of shareholders, the liquidator is in effect appointed by the shareholders by special resolution, not any individual shareholder or group of shareholders.
Therefore, we’ll be adding additional help text in relation to this field.
Questions about reporting
Is the interests statement a separate form or is it included in the 6-monthly report?
This question relates to the interests statement – in the new section 255A of the Companies Act. We expect insolvency practitioners to provide an interests statement as part of the liquidator's and administrator's first report and 6-monthly reports, in accordance with the new section 255(2)(c)(ii)(C) and (d)(ii). No separate file or form is required.
Are we required to file an updated interest statement at 6-monthly intervals?
Liquidators and administrators are required to:
- prepare an interests statement disclosing:
- any relationships that could reasonably be perceived as creating a conflict of interest
- the nature of the conflict
- how the conflict will be managed, and
- update these statements every 6 months to capture any new information.
A new statement is not necessarily required every 6 months - you will only need to update the statement if there is any new information and/or a conflict arises (in accordance with new section 255A(4)).
No separate file or form is required, see the answer to the question above.
Is the summary report an online form or a report prepared and filed as other reports are?
It is an online form that will be available via a new 'File Summary Report' tab as soon as the final report has been submitted online.
When completing and filing summary reports – in certain cases, prescribed required information has a value of ‘nil/unknown’, but the form does not appear to allow this to be entered. What should be done in this case?
We advise our customers to leave the field blank if the value is not applicable, or the information was not practicably available. Please use "0" (zero) if the amount is actually zero.
How are you able to amend a filed summary report?
We will need to go through the Power of Correction process. You can read about this more on our website: Applying for a correction to the register . We will subsequently delete the filed summary report and enable the 'File Summary Report' tab for you to file the report again.
Is there a blank summary report that can be downloaded? Not at this stage. We will look into publishing a template on the Insolvency Practitioners Register website soon. Please email us at firstname.lastname@example.org if you would like us to notify you once it’s published.
How long after liquidation do you have to complete the summary report?
According to the legislation 'as soon as practicable'. We will expect you to file the summary report within one month submitting the final report.
With the summary report - is there a CSV option or something similar that can be uploaded with all the detail on it, rather than having to enter it manually?
Currently, no. During the early consultation, CSV was proposed; however, the respondents expressed concerns that a CSV file upload "would be an additional compliance cost passed on to creditors".
It was also felt that CSV was “a simple file format that relies on the data being in exactly the right layout, and is difficult to verify, which could increase the risk of error when exporting/importing the data for the Registrar’s statistical analysis purposes”. It was suggested that we develop web-based forms, as this would provide a simpler reporting method for practitioners, and enable them to check their information before submitting.
Will a New Zealand practitioner be able to practise in Australia?
Yes. In accordance with the Trans-Tasman Mutual Recognition Arrangement and associated state legislation, licensed New Zealand practitioners should be able to practise in Australia once they’ve applied for and been granted registration with the Australian regulator (ASIC) and meeting relevant ongoing requirements.
Can a practitioner claim remuneration for investigating and reporting? Will a practitioner be required to investigate and report if there are no remaining assets to fund that remuneration?
We have sought NZICA's and RITANZ's views on this. It would not be good practice to charge separately for doing this. Any compliance obligations relating to the appointment should be taken into account in the underlying fee structure.
Is there a new timeframe in which companies already undergoing liquidation through a high court-appointed must complete the liquidation process?
Schedule 1, clause 5 of the Insolvency Practitioners Regulations 2020 includes transitional provisions allowing non-licensed liquidators to complete insolvency engagements accepted prior to 1 September 2020. These must, however, be completed by the end of 1 September 2021. This transitional period is intended to allow liquidators that do not wish to become licensed, to complete or transfer existing liquidations. Those relying on this transitional period must:
- complete all liquidation engagements by the end of 1 September 2021; or
- resign as liquidator; or
- transfer liquidation engagements to a licensed insolvency practitioner; or
- obtain a licence to act as an insolvency practitioner.