Insolvency Tidbits

Personal insolvencies drop 9.7% nationally in September 2018 quarter

Personal insolvencies = bankruptcies, debt agreements & personal insolvency agreements

  • Personal insolvencies dropped in all states except NSW (rise of 0.4% due to a rise in debt agreements).
  • Bankruptcies fell in all states except WA.
  • Bankruptcies at record quarterly low in South Australia.
  • Bankruptcies in Tasmania at lowest quarterly level since 1989.
  • WA had the highest proportion of business-related personal insolvencies.

 

National Redress Scheme for Institutional Child Sexual Abuse (Consequential Amendments) Act 2018

  • Became law in June 2018.
  • Has added a new paragraph 116(2)(ga) to S116(2) of the Bankruptcy Act, providing as an item excluded from divisible property:

“(ga) a payment under the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 to the bankrupt (whether before or after he or she became a bankrupt and whether or not he or she is the person who suffered the sexual abuse to which the payment relates); …”

One-year bankruptcies – an update

The proposal was codified into the Bankruptcy Amendment (Enterprise Incentives) Bill 2017

  • Original proposal was in the Government’s National Innovation Statement issued on 7 December 2015.
  • Progress to implement was slow, particularly stalling with the Federal Election in July 2016.
  • 19 October 2017-Bill introduced into Federal Parliament.
  • November 2017-Bill referred to the relevant Senate Committee, who recommended that the Senate pass the Bill with only one suggested change.
  • Bill listed for debate on the evening of 13 August 2018 but it was not heard.

Thought – if the Bill is not passed by the end of this year, the Federal Election next year is likely to cause considerable further delay.

 

Director Identification Numbers on the way

On 1 October 2018 the Government released the first tranche of draft legislation to facilitate Modernising Business Registers and provide a legal framework for Director Identification Numbers (“DINs”).

The draft legislation was open for submissions until 26 October 2018.

Under the proposed legislation directors will be compelled to register for a lifetime ID number.

There will be penalties for failing to apply for a number, knowingly applying for multiple DINs and misrepresenting a DIN to a government body or registered body.

Thought – most industry bodies are in support of the proposed legislation (with some modifications) but will it really rein in illegal phoenixing activity, one of the main motivations behind the legislation?

 

A new RATA

On 1 November 2018 ASIC released a new document entitled ROCAP (Report on Company Activities and Property) which replaces the long-standing RATA (Report As To Affairs).

Directors and officers will be required to complete the new ROCAP for any new external administrations commencing post 1 November 2018.

 

6 November 2018