South Australian Consolidated Acts

ASSOCIATIONS INCORPORATION ACT 1985 - SECT 49AD

49AD—Incurring debts not likely to be paid

        (1)         Where—

            (a)         an incorporated association has incurred a debt; and

            (b)         immediately before the time when the debt was incurred—

                  (i)         there were reasonable grounds to expect that the incorporated association will not be able to pay all its debts as and when they become due; or

                  (ii)         there were reasonable grounds to expect that, if the incorporated association incurs the debt, it will not be able to pay all its debts as and when they become due; and

            (c)         the incorporated association was, at the time when the debt was incurred, or becomes, at a later time, an incorporated association to which this Division applies,

a person who was a member of the committee of the association, or took part in the management of the association, at the time when the debt was incurred commits an offence.

Maximum penalty: $5 000 or one year imprisonment.

        (2)         In any proceedings against a person under subsection (1) it is a defence if proved—

            (a)         that the debt was incurred without the person's express or implied authority or consent; or

            (b)         that at the time when the debt was incurred, the person did not have reasonable cause to expect—

                  (i)         that the incorporated association would not be able to pay all its debts as and when they became due; or

                  (ii)         that, if the incorporated association incurred that debt, it would not be able to pay all its debts as and when they became due.

        (3)         Where—

            (a)         an incorporated association has done an act (including the making of a contract or the entering into of a transaction) with intent to defraud creditors of the association or of any other person or for any other fraudulent purpose; and

            (b)         the incorporated association was at the time when it does the act, or becomes at a later time, an incorporated association to which this Division applies,

a person who was knowingly concerned in the doing of the act with that intent or for that purpose commits an offence.

Maximum penalty: $10 000 or two years imprisonment.

        (4)         A certificate issued by a court stating that a person specified in the certificate—

            (a)         was convicted of an offence under subsection (1) in relation to a debt specified in the certificate incurred by an incorporated association so specified; or

            (b)         was convicted of an offence under subsection (3) in relation to an incorporated association specified in the certificate,

is, in any proceedings, prima facie evidence of the matters stated in the certificate.

        (5)         A document purporting to be a certificate issued under subsection (4) will, unless the contrary is established, be deemed to be such a certificate and to have been duly issued.