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Companies Act 1993

Liquidations - Appointment and supervision of liquidators

280: Who may be appointed as liquidator

You could also call this:

“Rules for who can and cannot be appointed as a company liquidator”

You can be appointed as a liquidator of a company if you are a licensed insolvency practitioner and are allowed to act as a liquidator under the Insolvency Practitioners Regulation Act 2019. However, you can’t be a liquidator if you fall into certain categories.

You can’t be a liquidator if you are a creditor of the company or if you’ve been a director, auditor, or receiver of the company or a related company in the last two years. You also can’t be a liquidator if you’ve been a director of a creditor of the company in the last two years.

You’re not allowed to be a liquidator if you own shares in the company or have a big interest in shares of a creditor of the company. The same goes for shares in related companies.

If you’ve provided professional services to the company or had a business relationship with the company, its main shareholder, or its directors in the last two years, you can’t be a liquidator. This rule doesn’t apply if you were hired to check the company’s financial health or if all the creditors agree to your appointment.

You also can’t be a liquidator if you’re related to any of the people mentioned above or if you’re not allowed to be a receiver of the company’s assets.

If you know you’re not allowed to be a liquidator but you accept the job or act as one anyway, you’re breaking the law and could be punished.

These rules don’t apply to Official Assignees, who are government officials who can act as liquidators.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321952.

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“Liquidator's role ends when company liquidation is complete”

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“Liquidator actions remain valid even if appointment rules aren't fully met”

Part 16 Liquidations
Appointment and supervision of liquidators

280Who may be appointed as liquidator

  1. A person may be appointed as a liquidator of a company if the person is—

  2. a licensed insolvency practitioner (or, if section 243A applies to the company, a licensed insolvency practitioner or any other person described in section 68(1) of the Insolvency Practitioners Regulation Act 2019); and
    1. permitted to act as a liquidator of the company under the Insolvency Practitioners Regulation Act 2019; and
      1. not disqualified under subsection (2).

        1. Unless the court orders otherwise, the following persons are disqualified from being appointed or acting as a liquidator of a company:

        2. a creditor of the company:
          1. a person who has, within the 2 years immediately before the commencement of the liquidation, been a director, an auditor, or a receiver of the company or of a related company:
            1. a person who has, within the 2 years immediately before the commencement of the liquidation, been a director of a creditor of the company:
              1. a person who has, or who has had, within the 2 years immediately before the commencement of the liquidation,—
                1. a direct interest in a share issued by the company; or
                  1. an interest, direct or indirect, in 5% or more of any class of shares issued by a creditor of the company (but only if the person is aware that they have the interest):
                  2. a person who has—
                    1. a direct interest in a share issued by a related company of the company; or
                      1. an indirect interest in 5% or more of any class of shares issued by a related company of the company:
                      2. if an instrument confers a power to appoint a receiver of any assets of the company, a person who is disqualified by the instrument from acting as the receiver of any assets of the company:
                        1. a person who is a relative of a person described in any of paragraphs (a) to (f):
                          1. a person who has, or whose firm has, within the 2 years immediately before the commencement of the liquidation,—
                            1. provided professional services to the company; or
                              1. had a continuing business relationship with the company, its majority shareholder, or any of its directors, or with any of the company’s shareholders that (under its constitution or any other agreement) have a power to appoint or remove a director of the company:
                              2. a person to whom a prohibition order applies.

                                1. For the purpose of subsection (2)(c), each of the following is a director of a creditor of a company:

                                2. if the creditor is a company, a person occupying the position of a director of the company, by whatever name called:
                                  1. if the creditor is a limited partnership, a general partner (within the meaning of the Limited Partnerships Act 2008):
                                    1. if the creditor is a partnership other than a limited partnership, a partner:
                                      1. if the creditor is any other body corporate or unincorporated body, a person occupying a position in the body that is comparable with that of a director of a company.

                                        1. A person is not disqualified under subsection (2)(h)—

                                        2. if the professional services are provided, or the relationship arises, by reason only of the appointment of the person, or of the person’s firm,—
                                          1. by, or at the instigation of, the company or a creditor or other party that has an actual or potential financial interest in the company; and
                                            1. to investigate or to advise on the solvency of the company or to monitor the affairs of the company; or
                                            2. if all the creditors consent to the appointment of the person; or
                                              1. if section 243A applies to the company.

                                                1. If subsection (4)(a) applies, subsection (2)(a) or (c) does not disqualify a person merely because the person is (or was) a creditor, or a director of a creditor, of the company as a consequence of the appointment referred to in subsection (4)(a).

                                                2. A person commits an offence, and is liable on conviction to the penalty set out in section 373(2), if—

                                                3. the person knows or ought reasonably to know that they are disqualified under subsection (2); and
                                                  1. the person,—
                                                    1. with their consent, is appointed as a liquidator; or
                                                      1. acts as a liquidator.

                                                      2. See also section 8(2) of the Insolvency Practitioners Regulation Act 2019.

                                                      3. This section does not apply to an Official Assignee.

                                                      Notes
                                                      • Section 280: replaced, on , by section 46 of the Insolvency Practitioners Regulation (Amendments) Act 2019 (2019 No 28).