ASSOCIATIONS INCORPORATION ACT 1985 - SECT 41C

ASSOCIATIONS INCORPORATION ACT 1985 - SECT 41C

41C—Declaration of solvency

        (1)         Where it is proposed to wind up an incorporated association voluntarily, a majority of the members of the committee may make a written declaration to the effect that they have made an inquiry into the affairs of the association and that, at a meeting of the committee, they have formed the opinion that the association will be able to pay its debts in full within a period not exceeding 12 months after the commencement of the winding up.

        (2)         A declaration made under this section must be made and lodged with the Commission before the date on which notices of the meeting at which the resolution for winding up is to be proposed are sent out, or at a later date approved by the Commission.

        (3)         A statement showing the affairs of the association, in the form prescribed by the regulations, must be attached to a declaration under this section.

        (4)         A declaration under this section has no effect unless—

            (a)         the resolution for voluntary winding up is passed within the period of five weeks after the making of the declaration or within any further period approved by the Commission (whether approved before or after the end of that five week period); and

            (b)         the other requirements of this section have been complied with.

        (5)         A member of the committee who makes a declaration under this section (including a declaration that has no effect in accordance with subsection (4)) without having reasonable grounds for the opinion stated in the declaration is guilty of an offence.

Maximum penalty: $5 000 or imprisonment for one year.

        (6)         If the association is voluntarily wound up within the period of five weeks after the making of the declaration or a further period approved by the Commission under subsection (4)(a) but its debts are not paid or provided for in full within the period stated in the declaration, it will be presumed, unless the contrary is shown, that a member of the committee who made the declaration did not have reasonable grounds for his or her opinion.