Enter to open, tab to navigate, enter to select
Liquidation
Practical Law ANZ Glossary w-018-2819 (Approx. 3 pages)
Glossary
Liquidation
A type of insolvency procedure (also referred to as winding up) in which a liquidator is appointed to a company to take control of the company and its property, and wind up its affairs in an orderly way for the benefit of creditors.
A liquidator is most commonly appointed in one of the following circumstances:
- Voluntarily by the company itself, where it is either solvent or insolvent (a voluntary liquidation).
- By court order on the application of a creditor after non-compliance with a statutory demand (an involuntary liquidation).
- At the end of a period of voluntary administration where the continuation of the company is not financially viable and creditors have resolved that the company be wound up or where a deed of company arrangement (DOCA) has been terminated.
A liquidator's principal duty is to take possession of, protect, realise and distribute the company's assets or their proceeds (if any).
The conduct of a liquidation is governed by:
(Part 16 of the CA 1993 and the Companies Act 1993 Liquidation Regulations 1994 has been amended to implement a new licensing and regulation regime for liquidators, see the Insolvency Practitioners Regulation Act 2019 and the Insolvency Practitioners Regulation (Amendments) Act 2019. The new licensing and regulation regime commenced on 1 September 2020 (with a one-year transition period for individuals to apply for licensing)).
For more information, see: