Who Appoints a Liquidator to an Insolvent Company?

Who can appoint a liquidator depends on what type of liquidation is contemplated.

Voluntary Liquidation by the Company

A voluntary liquidation is initiated by the company itself (by the directors and shareholders). The directors and shareholders can nominate and appoint a liquidator of their choosing. A voluntary liquidation is also known as a Creditors Voluntary Liquidation. The reference to “creditors” is because the creditors can replace the liquidator appointed by the company at the first meeting of creditors.

Compulsory Winding up by the Court

A compulsory winding up of a company is ordered by a Court but is usually initiated by a creditor who is owed more than the statutory minimum debt what is the statutory minimum debt to wind up a company, but it can also be initiated by the Australian Securities and Investments Commission under certain circumstances. Under either scenario the creditor or ASIC will nominate a liquidator. If there has been no nomination by the creditor or ASIC, then the court will nominate a liquidator from its panel of liquidators. If the nominated liquidator consents to the appointment (by signing a consent to act), then they will be formally appointed by the Court to perform the winding up.
It is worthy to note, that once a winding up application has been filed in court, the company cannot be wound up on a voluntary basis.
If you would like to understand more about who can appoint a liquidator, please call Australian Company Liquidators on 1800 731 155.

The information provided in this site is general in nature and should not be relied upon for your specific circumstance. Call us on 1800 731 155 for a free initial consultation to discuss your specific issues.

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