A long overdue update to the RATA form used in insolvency.


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A long overdue update to the RATA form used in insolvency.

After using more or less the same format for over 120 years, ASIC has finally replaced the RATA (Report As To Affairs) form with a ROCAP (Report On Company Activities And Property). As with anything new, it will take time to get used to the form, but we’re here to help!

The RATA is one of the most commonly used forms in corporate insolvency administrations. Its purpose is to show the financial position of a company at the date it enters into liquidation or other external administration. The form gives external administrators information that enables them to identify assets, contact creditors, carry out investigations and estimate potential dividends.

It is also a complex form and for many years has been regarded as outdated. There have been decades of discussions, surveys and comparisons with other countries and now, after an extensive revision process, a more relevant and comprehensible form has been released. Unfortunately, there was little direct consultation with the body of insolvency practitioners, so the content is as much of a surprise to us as it will be to your clients.

Nevertheless, a working model of the new RATA is here. The Report On Company Activities And Property (ROCAP) was introduced in November 2018 and it is now compulsory to use the new form, as of 1 February 2019.

About the form:

  • It is designed to reflect ‘best practice’ and uses behavioural design tools to assist insolvency practitioners (IPs) in doing their job. It is claimed that the revised form allows IPs to obtain better information about events leading up to their insolvency appointment, which might be useful and relevant to IPs’ investigations, asset recoveries and reporting to creditors and to ASIC.
  • It consists of two parts, with instructions.

Part A: with attachments, is lodged with ASIC and therefore goes on the public record. It consists of a series of questions about debts owing to and by the company and assets owned by the company. The questions are general and most can be answered with a simple ‘tick the box’ approach.   For most questions, directors are required to read the instructions and provide a supporting attachment.

Part B: is essentially a questionnaire about the company’s activities and since it contains information of a personal nature, is available only to the external administrator. The areas covered include management; books and records; company history and activities; and payment arrangements. Part B IS NOT lodged with ASIC.

  • The biggest change in the new ROCAP form is that directors are no longer required to provide a summary financial statement for the company, but to focus instead on information about the company’s assets, liabilities and activities. More information than figures, so to speak!

Benefits of the new form:

  • It aims to lower costs, by reducing the time that IPs spend dealing with multiple forms and letters (such as a separate director’s questionnaire) to gather information from directors about their insolvent company. It is claimed that directors now have a form which, as testing shows, will be easier for them to complete.
  • It is argued that the changes will make directors more inclined to provide the information sought and to provide the correct information. This will reduce the time spent following up information not initially provided by directors and the number of requests from liquidators under ASIC’s Liquidator Assistance Program.
  • Attachments for specific questions can be printed directly from most accounting software, which saves time when filling in forms.
  • The detailed, easy-to-follow instructions cater for varying ability levels and allow the director/officer to move easily between the form and the instructions as they complete the form. The instructions also include examples that show how to answer questions.

At 50 pages, however, the sheer size of the ROCAP is daunting. It is more than 5 times the size of the current form and 2-3 times larger than comparable forms in other countries.

As advisors to your clients, you will often be called upon to assist them in completing forms. We are keen to help you understand this new form so you can provide the best possible service. To be fair, it’s also in our best interests; we can only do our job properly if we have the right information.

At dVT Group, we are focused on helping all stakeholders, and we do this by ensuring we get the right information, on time, from directors. If we can help you to help your clients by explaining the new ROCAP in more detail, please feel free to contact Suelen McCallum at dVT Group on (02) 9633 3333 or by email at mail@dvtgroup.com.au.