What is a Company Liquidator?
When considering a company liquidation, many people can confuse the roles of liquidators and administrators. In order to solve this misconception, we’ve put together some key points to help you differentiate.
What is the Purpose of a Liquidator?
Company liquidators are responsible for the entire process of a company liquidation. This includes selling the company’s assets and distributing any surplus funds to creditors in accordance with the priorities set out in the law. Liquidators must ensure the most cost-effective outcome for all stakeholders.
What is a Liquidator’s Role?
The role of a liquidator differs to an administrator. Liquidators must investigate the cause of the company’s failure and report their findings to the Australian Securities and Investment Commission (ASIC). After the ASIC considers such report, they will either commence further enforcement action or they will issue a clearance to the liquidator. A liquidator’s investigations will include a report on any potential claims for preferential payments, insolvent trading or any other director related transactions. The liquidator’s main role is to sell the company’s assets and distribute the surplus funds to the company’s creditors. Liquidators are required to act without any bias and with independence.
What is an Administrator’s Role?
Administration is one step before liquidation. Administrators are appointed to companies in financial distress so as to give the company an opportunity to develop and implement a restructuring plan with creditors. This is called a “deed of company arrangement” (DOCA). The role of an administrator is to compare the outcome creditors would receive under the proposed DOCA to what creditors would receive in liquidation.
Who Can Be a Liquidator?
Liquidators are usually accountants in practice who have studied both accounting and law and have extensive experience in the insolvency industry.
At the Australian Company Liquidations we have 2 in house company liquidators ready to assist you with your company liquidation.
If you are company director and you are considering an administration or a company liquidation, then call us now. We have a team of highly skilled and friendly accountants ready to assist.
To better understand which option is better suited for your company, call Australian Company Liquidations today on 1800 731 155.