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Power: Insolvency Practitioners Bill Passes First Reading

Contributor:
Fuseworks Media
Fuseworks Media
Simon Power
Simon Power

A bill which gives the Registrar of Companies new powers to ban incompetent or dishonest liquidators, receivers, and voluntary administrators passed its first reading in Parliament last night.

The Insolvency Practitioners Bill will introduce a negative licensing system to give the Registrar of Companies the statutory authority to place insolvency practitioners under supervision or prohibit them from providing corporate insolvency services.

Negative licensing is designed to target those who fail to carry out their duties in a competent and honest manner, while maintaining minimal restrictions on the rest.

"Insolvency practitioners are required to manage a number of competing tensions, all in a fraught environment, where there is not enough money to reimburse everybody all they are owed," Mr Power said.

Once the legislation has passed, the Registrar of Companies will be able to take into account conduct that has taken place before the new law was enacted.

Those practitioners subject to a banning or supervision order will also be placed on a publicly accessible electronic register.

The bill has been referred to the Commerce Select Committee for public consultation.

The new regime is expected to come into force in the second half of next year.

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