20
Jul 2017

Liquidator Renewal Shenanigans

Amendments to the Corporations Act 2001 (Act) which came into effect on 1 March 2017 impose on liquidators an obligation to renew their registrations with ASIC every three years, when previously the registration had no specified end date.

Two liquidators were recently caught out by failing to register in accordance with the Act and had to make an application to the Federal Court to extend the time to apply to ASIC to have their registration renewed in Deppeler, in the matter of Deppeler [2017] FCA 768.

Although orders were made extending the time for the application for registration to be made, the Court declined however to make an orders with respect to regularising the position with their appointments as liquidators and administrators.  This was due to the limitation on the Court contained in the Act to make such orders “as it thinks fit in relation to a registered liquidator” on the basis the plaintiffs were not at the time registered liquidators.

It was noted however that ASIC Regulatory Guide 258, specifically RG258.77 (b) includes the following notation:

“Note: Your registration may cease to have effect even though you obtain an extension of time to lodge your renewal.  You may need to take steps to obtain court orders in relation to actions taken by you after your registration ceases to have effect.”

Liquidators should ensure their applications for registration are made before the due date to avoid the consequences of having their registration expire and having to make applications to the Court.

For more information, please contact ERA Legal.