LIQUIDATION OF A COMPANY
A liquidator may be put into liquidation by the appointment of a liquidator or an Official Assignee if:
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The company is unable to pay its debts |
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The company or the board has persistently or seriously failed to comply with the Companies Act |
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The company no longer meets the essential requirements for a company i.e. a name, one or more shares, one or more shareholders, and one or more directors, or |
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It is just and equitable that the company be put into liquidation. |
The liquidator may be appointed by:
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The board, on the occurrence of an event specified in the constitution |
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The court, on the application ofthe company, or a director, or a person on whom the constitution confers rights and powers of a sharehoilder, or a creditor, or the Register. |
From the commencement of the liquidation:
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The directors remain in office but their powers, functions, and duties cease apart from those required or permitted to be exercised as part of the liquidation process |
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Unless the court orders otherwise, company shares may not be transferred |
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Shareholders rights or liabilities cannot be altered |
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Unless the liquidator agrees, or the court orders, no person shall commence legal proceedings against the company, or exercise or enforce a right over company property |
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Shareholders cannot exercise any constitutional powers except for purposes of the liquidation process |
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The constitution cannot be altered |
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Any attachment, distraint, or execution completed by a creditor after the liquidation is voided |
The
commencement of liquidation does not effect the right of a secured creditor to
take possession of property under a fixed charge.
Without delay on being appointed the liquidator must give public notice of:
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The date and commencement of liquidation, and |
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Address and telephone number to which shareholders and creditors may direct enquiries during normal business hours |
The
principle duty of a liquidator is to take possession of the company’s assets,
to protect an realise them, and to distribute the proceeds to the creditors.
If there is a surplus after paying the creditors in full, the
liquidator’s duty is to distribute the surplus to shareholders in accordance
with the constitution.
If the Official Assignee is appointed as liquidator part of the
liquidation administration involves an investigation into the manner in which
the company was managed.
This investigation may identify offences or breaches of the Companies Act
and appropriate action will be taken.
On completion of the liquidation, the liquidator must prepare and send to every creditor that has an admitted claim and every shareholder:
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A statement that all known assets have been disclaimed, realised or distributed without realisation, all proceeds of realisation have been distributed, and the company is ready to be removed from the New Zealand register |
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A statement that all known assets have been disclaimed, realised or distributed without realisation, all proceeds of realisation have been distributed, and the company is ready to be removed from the New Zealand register |
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