Background
7. The Insolvency Act and the Companies Amendment Act were passed in November 2006, following a review of personal and corporate insolvency law. The Acts were part of the Insolvency Law Reform Bill.
8. The Insolvency Act 2006 replaces the Insolvency Act 1967. It updates the existing bankruptcy procedure in that Act and the alternative proceedings, such as summary instalment orders, compromises with creditors and proposals. The new Act also introduces the NAP. This applies to first time debtors who have no assets and who cannot repay debts. It is less punitive than the normal personal bankruptcy proceedings.
9. The Companies Act 2006 makes some amendments to the corporate insolvency provisions in the Companies Act 1993. Most significantly, it introduces a new business administration regime along the lines of the Australian voluntary administration regime. The Companies Amendment Act also introduces provisions dealing with the appointment of liquidators, voidable transactions, and the use of phoenix companies. Some technical changes are also made to increase the accountability of liquidators to creditors.
10. Both the Insolvency Act and the Companies Amendment Act require regulations to be made in order for them to operate, particularly regulations to provide for forms for applications, notices, fees, and other procedural requirements.
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