Providing assistance to external administrators - Books records and RATA
Company officers: to avoid penalties, you must assist the external administrator of the company with which you are associated.
Your Corporations Act obligations
As you may know, an external administrator has been appointed to the company with which you are associated. In this situation, the Corporations Act 2001 (Corporations Act) requires:
- certain officers of the company (such as directors) to provide the external administrator:
- a report as to the affairs of the company (commonly referred to as a RATA). Where external administrators possess the company’s books and records, company officers may seek access from the external administrator to enable them to fulfil their obligations to provide a RATA
- books, records, information and assistance
- other persons who have any books, records and/or assets of the company to disclose their existence to, and provide them at the request of, the external administrator.
In this information sheet, when we refer to companies under external administration this includes companies under receivership, voluntary administration, provisional liquidation or liquidation. When we refer to external administrators we mean liquidators, voluntary administrators, receivers, receivers and managers and controllers (e.g. any other person who has control of property of the company to enforce a debt owed by the company).
The effect of the Corporations Act is: company officers and other people with relevant books and records have a responsibility to the company, to creditors and to the community, and cannot obstruct duly appointed external administrators in the performance of their duties.
Substantial penalties may apply
Where a company officer fails to comply with their responsibilities, the external administrator may refer the matter to ASIC. Such referrals have frequently resulted in ASIC taking court action to assist the orderly realisation of assets or to force directors to provide RATAs and/or books and records. We regard failure to provide a RATA or to disclose and deliver up books and records as a serious breach of the Corporations Act.
Penalties imposed by the court may include fines of over $10,000 or imprisonment for breach of certain obligations by an officer.
If an officer fails to comply with court orders to fulfil their responsibilities within the required time, they may commit a continuing offence and may be liable to further prosecution. A continuing offence can attract an additional daily fine until the relevant obligation is complied with.
Key sections of the Corporations Act
Some relevant sections of the Corporations Act for a company in external administration are listed below. For full details of your responsibilities see the Corporations Act itself. You may want to seek your own legal advice on how to comply with these and your other legal obligations.
s83 Officers and other persons in default
s429 Officers to report to controller about corporation’s affairs
s430 Controller may require reports
s431 Controller may inspect books
s438B Directors to help administrator
s438C Administrator’s rights to company's books
s475 Report as to company’s affairs to be submitted to liquidator
s530A Officers to help liquidator
s530B Liquidator's rights to company’s books
s590 Offences by officers of certain companies
s1314 Continuing offences
Schedule 3 Penalties
For further information contact ASIC's Client Contact Centre Infoline on 1300 300 630.
This is Information Sheet 53 (INFO 53), reissued on 1 September 2017. Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance.