Document ID: chunk:federal_register_of_legislation:F2024C01249:reg:3:p43
Version: federal_register_of_legislation:F2024C01249
Segment Type: reg
Provision Reference: reg 3 (pt 43/60)
Character Range: 291053–293839

be an unfair preference;
 (b) whether, in the directors' opinion, there are reasonable grounds to believe that, on the declaration being given, the eligibility criteria for the simplified liquidation process will be met in relation to the company, and the reasons for that opinion.

5.5.03  Eligibility criteria for simplified liquidation process
 (1) For the purposes of paragraph 500AA(1)(d) of the Act, the test for eligibility is that the total liabilities of the company on the day on which the triggering event occurred must not exceed $1 million.
 (2) For the purposes of paragraph 500AA(1)(e) of the Act, a period of 7 years is prescribed.
 (3) For the purposes of paragraph 500AA(1)(f) of the Act, a period of 7 years is prescribed.
 (4) For the purposes of paragraph 500AA(2)(b) of the Act, a prescribed circumstance is that:
 (a) the other company is a related body corporate of the company in relation to which the eligibility criteria are to be met; and
 (b) the other company is, or has been:
 (i) under restructuring; or
 (ii) the subject of a simplified liquidation process; and
 (c) if subparagraph (b)(i) applies—the restructuring practitioner for the other company was appointed no more than 20 business days before the day on which the company in relation to which the eligibility criteria are to be met began to follow the simplified liquidation process; and
 (d) if subparagraph (b)(ii) applies—the other company began to follow the simplified liquidation process no more than 20 business days before the day on which the company in relation to which the eligibility criteria are to be met began to follow the simplified liquidation process.
 (5) For the purposes of paragraph 500AA(2)(c) of the Act, a prescribed circumstance is that:
 (a) the company has been under restructuring; and
 (b) the restructuring terminated no more than 20 business days before the day on which the company began to follow the simplified liquidation process.

Subdivision B—Simplified liquidation process

5.5.04  Transactions that are not voidable
 (1) This regulation is made for the purposes of paragraph 500AE(3)(b) of the Act.
 (2) An unfair preference of a company is not voidable despite subsection 588FE(2) of the Act, provided either subregulation (3) or (4) is satisfied.
 (3) This subregulation is satisfied if:
 (a) the company is subject to the simplified liquidation process; and
 (b) the transaction was entered into, or an act was done for the purposes of giving effect to it, before the day that is 3 months before the relation‑back day; and
 (c) no creditor under the transaction is a related entity of the company.
 (4) This subregulation is satisfied if:
 (a) the company is subject to the simplified liquidation process; and
 (b) the transaction was entered into,