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ASIC given power to liquidate companies

LEGISLATION introduced into parliament on 15 February will help employees of abandoned companies to access their entitlements.

The Corporations Amendment (Phoenixing and Other Measures) Bill 2012 contains amendments that give the corporate watchdog, the Australian Securities and Investments Commission (ASIC), the power to order the winding-up of abandoned companies, allowing workers access to entitlements.

Parliamentary Secretary to the Treasurer David Bradbury said the legislation delivers on one of the measures contained in the Labor Government’s ‘Protecting Workers’ Entitlements’ election commitment.

“Under the General Employee Entitlements and Redundancy Scheme (GEERS), employees can only access their entitlements if a company has been placed into liquidation,” Mr Bradbury said.

“These amendments will give ASIC the power to place a company into liquidation in a range of circumstances, including where ASIC has reason to believe that the company is no longer carrying on business or where a company has been deregistered but not liquidated.

“This means that the corporate watchdog can step in and wind-up a company so that workers are not dudded out of their entitlements where directors have walked out on their business.”

In addition, Mr Bradbury said the bill implements an important part of the government’s insolvency reform package by facilitating the establishment of a single online insolvency notices website.

“As part of the Gillard Government’s insolvency reform announced on 14 December 2011, insolvency notices will be required to be posted to a new website to be established as part of the ASIC website from 1 July 2012,” he said.

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