Plain language law

New Zealand law explained for everyone

Companies Act 1993

Liquidations - Liquidation committees

315: Liquidation committees

You could also call this:

“Group formed to help close down a company and represent those involved”

When a company is being closed down (liquidated), a group called a liquidation committee can be formed. This committee must have at least three people. These people can be those who are owed money by the company, people who own part of the company, or people who represent them.

The liquidation committee has some important jobs. They can ask the person in charge of closing down the company (the liquidator) for updates on how things are going. They can also call meetings for people who are owed money or who own part of the company. If needed, they can go to court to sort out any problems. They can also help the liquidator with their work.

There are special rules about how the liquidation committee should hold their meetings. These rules are written down in a separate document called Schedule 8.

If the liquidation committee calls a meeting for people who are owed money, they need to follow the rules in another document called Schedule 5.

Sometimes, there might not be enough people in the liquidation committee for it to work properly. If this happens, the liquidator needs to mention this in a report they write every six months.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM322813.

Topics:
Business > Industry rules
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“Requesting and holding meetings during liquidation for creditors and shareholders”

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316: Establishment of Liquidation Surplus Account, or

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Part 16 Liquidations
Liquidation committees

315Liquidation committees

  1. A liquidation committee must consist of not less than 3 persons who are—

  2. creditors or shareholders; or
    1. persons holding general powers of attorney from creditors or shareholders; or
      1. authorised directors or representatives of companies which are creditors or shareholders of the company in liquidation.

        1. A liquidation committee has the power to—

        2. call for reports from the liquidator on the progress of the liquidation:
          1. call a meeting of creditors or of shareholders:
            1. apply to the court under section 284 and section 286:
              1. assist the liquidator as appropriate in the conduct of the liquidation.

                1. The provisions set out in Schedule 8 govern proceedings at meetings of liquidation committees.

                2. A meeting of creditors called under subsection (2)(b) shall be held in accordance with Schedule 5.

                3. Where, by reason of vacancies in a liquidation committee, the committee is unable to act, the liquidator must call attention to the situation in the next 6-monthly report required to be prepared and sent under section 255(2)(d).