CLOSE CORPORATIONS ACT 1989 No. 120 of 1989 - SECT 115 Replacement of sections 459, 460, 461 and 462

CLOSE CORPORATIONS ACT 1989 No. 120 of 1989 - SECT 115

115. For the purposes of the application of Part 5.4 of the Corporations Act
in relation to close corporations, sections 459, 460, 461 and 462 of that Act
shall be deemed to be omitted and the following sections substituted: Winding
up of close corporation that has ceased to be a trading corporation

"459. (1) The Court may order the winding up of a close corporation (other
than a new close corporation) that is not a trading corporation.

"(2) Subsections (3), (4) and (5) have effect for the purposes of an
application made in relation to a close corporation on the ground provided for
by subsection (1).

"(3) Unless the contrary is proved, the Court may presume that the corporation
is not a trading corporation at a particular time if, as at that time:

   (a)  the corporation:

        (i)    has contravened section 26 of the Close Corporations Act 1989;
               and

        (ii)   has lodged no certificate of compliance under section 83 of
               that Act; or

   (b)  the corporation has lodged a notice under subsection 29 (2) of the
        Close Corporations Act 1989.

"(4) Unless the contrary is proved, the Court may presume that the corporation
is not a trading corporation at a particular time if, as at that time:

   (a)  the corporation has contravened section 83 of the Close Corporations 
        Act 1989 in relation to a particular financial year;

   (b)  the Commission has given to the corporation a written notice requiring
        the corporation to lodge its certificate of compliance for that
        financial year within a specified period of at least 28 days after the
        notice is so given; and

   (c)  that period has ended and the corporation has not lodged a certificate
        of compliance for that financial year that includes a statement
        complying with section 84 of the Close Corporations Act 1989.

"(5) Unless the contrary is proved, the Court may presume that a close
corporation is not a trading corporation at a particular time if:

   (a)  as at that time, the corporation:

        (i)    has lodged for the purposes of section 26 of the Close 
               Corporations Act 1989 a statement stating to the effect that
               the corporation does not intend as mentioned in subsection 26
               (3) of that Act; and

        (ii)   has lodged no certificate of compliance under section 83 of
               that Act; or

   (b)  a statement included under section 84 of the Close Corporations Act 
        1989 in the last certificate of compliance lodged by the corporation
        before that time states to the effect that:

        (i)    as at a particular day, trading activities were not a
               substantial part of the corporation's activities;

        (ii)   the corporation does not intend as mentioned in paragraph 84
               (5) (b) of the Close Corporations Act 1989;

        (iii)  the corporation became dormant on a particular day that is not
               less than 3 months before that time;

        (iv)   trading activities were not a substantial part of the
               activities in which the corporation engaged during a particular
               period; or

        (v)    the corporation does not intend as mentioned in paragraph 84
               (6) (c) of the Close Corporations Act 1989. Winding up of
               close corporation on the ground of insolvency

"460. (1) The Court may order the winding up of a close corporation that is
unable to pay its debts.

"(2) For the purposes of an application that is made in relation to a close
corporation on the ground provided for by subsection (1), the corporation
shall be deemed to be unable to pay its debts if:

   (a)  a creditor by assignment or otherwise to whom the corporation is
        indebted in a sum exceeding $1,000 then due has served on the
        corporation a demand, signed by or on behalf of the creditor,
        requiring the corporation to pay the sum so due and the corporation
        has, for 3 weeks after the service of the demand, failed to pay the
        sum or to secure or compound for it to the reasonable satisfaction of
        the creditor;

   (b)  execution or other process issued on a judgment, decree or order of
        any court in favour of a creditor of the corporation is returned
        unsatisfied in whole or in part; or

   (c)  the Court, after taking into account any contingent and prospective
        liabilities of the corporation, is satisfied that the corporation is
        unable to pay its debts. General grounds for winding up of a
        close corporation

"461. The Court may order the winding up of a close corporation if:

   (a)  the corporation becomes a holding company of another body corporate;

   (b)  because of subsection 63 (3) of the Close Corporations Act 1989 it has
        no members who are entitled to participate in the management of the
        affairs of the corporation;

   (c)  it has no members and has not had any members for a period exceeding 9
        months;

   (d)  none of the members is a resident of Australia or the number of
        members that are residents of Australia is less than a majority of the
        members;

   (e)  the number of members exceeds 10;

   (f)  a decisive number of members have decided that it be wound up;

   (g)  it does not commence business within one year from its incorporation
        or suspends its business for a whole year;

   (h)  a member has acted in affairs of the corporation in the member's own
        interest rather than in the interests of the members as a whole, or in
        any other manner whatsoever that appears to be unfair or unjust to
        other members;

   (j)  affairs of the corporation are being conducted in a manner that is
        oppressive or unfairly prejudicial to, or unfairly discriminatory
        against, a member or members or in a manner that is contrary to the
        interests of the members as a whole;

   (k)  an act or omission, or a proposed act or omission, by or on behalf of
        the corporation was or would be oppressive or unfairly prejudicial to,
        or unfairly discriminatory against, a member or members or was or
        would be contrary to the interests of the members as a whole;

   (m)  the Commission has stated in a report prepared under Division 1 of
        Part 3 of the Commission Act that, in its opinion:

        (i)    the corporation cannot pay its debts and should be wound up; or

        (ii)   it is in the interests of the public, of the members or of the
               creditors that the corporation should be wound up; or

   (n)  the Court is of opinion that it is just and equitable that the
        corporation be wound up. Standing to apply for winding up

"462. (1) Any one or more of the following may apply for an order to wind up a
close corporation on the ground provided for by subsection 459 (1):

   (a)  the Commission;

   (b)  the Minister;

   (c)  the corporation.

"(2) Subject to this section, any one or more of the following may apply for
an order to wind up a close corporation on a ground provided for by subsection
460 (1) or section 461 (other than paragraph (b)):

   (a)  the corporation;

   (b)  a creditor (including a contingent or prospective creditor) of the
        corporation;

   (c)  a contributory;

   (d)  the liquidator of the corporation;

   (e)  the Commission pursuant to section 453;

   (f)  an official manager of the corporation appointed under Part 5.3;

   (g)  a person (other than the Commission) who has been granted leave under
        section 453.

"(3) The Commission may apply for an order to wind up a close corporation on
the ground provided for by paragraph 461 (b).

"(4) The Court shall not hear an application by a person being, or persons
including, a contingent or prospective creditor of a close corporation for an
order to wind up the corporation unless and until:

   (a)  such security for costs has been given as the Court thinks reasonable;
        and

   (b)  a prima facie case for winding up the corporation has been established
        to the Court's satisfaction.

"(5) Except as permitted by this section, a person is not entitled to apply
for an order to wind up a close corporation.".