What is the role of the liquidator?
A company liquidation must be carried out by a Registered Liquidator so to ensure that all parties are treated fairly and as prescribed by the Corporations Act. The liquidator must be independent and has a duty to act impartially for the benefit of all creditors. The liquidator has a number of duties to carry out and listed below are some examples (these are not exhaustive):
- To protect and to realise the assets of the company
- To investigate the affairs of the company and report any wrong doings such as potential claims for preferential payments, insolvent trading or any other breaches of the Corporations Act to the Australian Securities and Investments Commission (”ASIC”).
- Establish the reason for the company’s failure and to report these findings to ASIC
- To distribute any surplus funds (after the costs and expenses of the liquidation have been paid) to the employees and thereafter the unsecured creditors on a pro-rata basis.
- After the affairs of the company have been fully dealt with and ASIC has provided the liquidator with a clearance the liquidator must hold a final liquidation meeting of members and the creditors.
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