Insolvency Practice Rules (Corporations) 2016
made under section 105‑1 of Schedule 2 to the
Corporations Act 2001
Compilation No. 07
Compilation date: 26 November 2022
Includes amendments up to: F2022L01520
About this compilation
This compilation
This is a compilation of the Insolvency Practice Rules (Corporations) 2016 that shows the text of the law as amended and in force on 26 November 2022 (the compilation date).
The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Legislation Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the series page on the Legislation Register for the compiled law.
Application, saving and transitional provisions for provisions and amendments
If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see the endnotes.
Modifications
If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the series page on the Legislation Register for the compiled law.
Self‑repealing provisions
If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.
Contents
Part 1—Introduction 1
Division 1—Introduction 1
1‑1..................................................Name 1
1‑10...............................................Authority 1
Division 5—Definitions 2
5‑5............................................The Dictionary 2
5‑10.................................What is a current registration? 3
5‑15............................Meaning of material personal interest 3
Part 2—Registering and disciplining practitioners 4
Division 15—Register of Liquidators 4
15‑1......................................Register of Liquidators 4
Division 20—Registering liquidators 5
20‑1Qualifications, experience, knowledge and abilities required by applicants for registration generally 5
20‑2Qualifications, experience, knowledge and abilities required by applicants for registration to practise only as a restructuring practitioner 6
20‑5...........................Conditions on registration of liquidators 7
Division 35—Notice requirements 9
35‑1................Events of which a registered liquidator must notify ASIC 9
Division 40—Disciplinary and other action 10
40‑1......Industry bodies that may notify ASIC of grounds for disciplinary action 10
Division 50—Part 2 committees 11
50‑1...............................................Authority 11
50‑5............Part 2 committee may generally determine its own procedures 11
50‑6..........................................Virtual meetings 11
50‑
Overview
The Insolvency Practice Rules (Corporations) 2016 were enacted to provide detailed rules regarding the registration, discipline, and practice of liquidators and restructuring practitioners under the Corporations Act 2001. This legislative instrument is made under the authority of the Act and serves to supplement and elaborate on the provisions set forth in the Insolvency Practice Schedule (Corporations). The primary objective of these rules is to ensure the proper conduct, qualification, and management of liquidators and restructuring practitioners, thereby maintaining the integrity and efficiency of corporate insolvency processes. The rules cover a wide range of topics, including the qualifications and experience required for registration, the conditions under which liquidators may practice, the processes for disciplinary action, and the procedures for meetings and information requests during external administrations. By establishing these guidelines, the rules aim to protect the interests of creditors and other stakeholders while facilitating the orderly administration of insolvent companies.
Scope and Application
The Insolvency Practice Rules (Corporations) 2016 is a legislative instrument made under the Corporations Act 2001. These rules apply to the registration and disciplining of liquidators, and the general rules relating to external administrations, which includes meetings, information, remuneration, and other aspects of the administration process. The rules pertain to registered liquidators, external administrators, creditors, members, and other relevant parties involved in corporate insolvency and restructuring processes. They have a Commonwealth jurisdiction and are applicable nationally. The Act does not explicitly state any exclusions, but certain provisions apply only under specific conditions or to particular types of administrations. Subordinate instruments, such as the Insolvency Practice Rules (Corporations) Amendment Rules, extend or modify the application of these rules in certain circumstances, such as virtual meetings and electronic communication. The rules were last amended on 26 November 2022, and include amendments up to that date. Uncommenced amendments and editorial changes are not reflected in this compilation.
Key Provisions
- The Insolvency Practice Rules (Corporations) 2016 sets out various requirements and rules for liquidators and other parties involved in the external administration of companies. Section 15-1 mandates that the Australian Securities and Investments Commission (ASIC) must maintain a Register of Liquidators, which must include details such as the name of the registered liquidator, the date of their first registration, the addresses of their places of practice, particulars of any disciplinary action taken against them, and a summary of any conditions imposed on their registration. Section 20-1 specifies the qualifications, experience, knowledge, and abilities required by applicants for registration as liquidators, while Section 20-2 details the requirements for applicants seeking to practise only as a restructuring practitioner. Section 35-1 lists events that registered liquidators must notify ASIC of, such as ceasing to practise, changing their name, or changing their practice address.
- Obligations under the Act include the requirement for registered liquidators to undertake continuing professional education (Section 20-5(2)) and for restructuring practitioners to provide reports to creditors and members regarding the remuneration they propose to receive (Sections 70-45 and 70-50). Liquidators must also provide reports to ASIC upon their appointment and the ending of administrations (Section 70-60). Additionally, members of Part 2 committees must observe natural justice and disclose any material personal interests they have in matters being considered by the committee (Sections 50-55 and 50-60).
- Failure to comply with the provisions of the Insolvency Practice Rules may result in civil or criminal penalties. For example, Section 90-18 requires reviewing liquidators to declare any relevant relationships they may have with parties involved in the external administration, and failure to do so can lead to disciplinary action against the liquidator. Similarly, Section 60-2 prohibits external administrators from deriving profit or advantage from the administration of a company, except in limited circumstances, with violations potentially resulting in disciplinary action. While specific penalties are not outlined in the Rules themselves, breaches of the Corporations Act 2001, which the Rules are made under, can result in fines and/or imprisonment.
- Area of Law
- Insolvency Law
- Instrument
- Regulation
- Concepts
- Commencement Provisions
- Repeal & Amendment
- Delegated & Subordinate Legislation
- Reporting & Disclosure Obligations
- Committees of Inspection
- Virtual Meetings
