Plain language law

New Zealand law explained for everyone

Companies Act 1993

Liquidations - Liquidation Surplus Account

316: Establishment of Liquidation Surplus Account

You could also call this:

“Setting up a special account for leftover money from closed companies”

When a company is closed down, sometimes there’s money left over that no one has claimed. The person in charge of closing the company (called a liquidator) must give this money to Public Trust. After 12 months, if no one has claimed the money, Public Trust puts most of it into a special account called the Liquidation Surplus Account.

The money in this account can be invested to earn more money. The interest earned is also used in the same way as the other money in the account.

You can use the money in this account for two main things:

  1. To pay people who were supposed to get money when a company closed down, but didn’t receive it earlier.
  2. To help pay for costs when closing down other companies, if there’s not enough money left in those companies to cover all the expenses.

Public Trust manages this account, but they follow instructions from a person called the Official Assignee for New Zealand. This person decides how to use the money in the account.

When Public Trust pays money from this account, they don’t need to check if the exact amount for each company was put into the account earlier. They just follow the Official Assignee’s instructions.

This money is treated differently from other unclaimed money. The rules in the Unclaimed Money Act 1971 don’t apply to the money in this account.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM322815.

Topics:
Business > Industry rules
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“Group formed to help close down a company and represent those involved”

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Part 16 Liquidations
Liquidation Surplus Account

316Establishment of Liquidation Surplus Account

  1. Money representing unclaimed assets of a company standing to the credit of a liquidator shall, after completion of the liquidation, be paid to Public Trust.

  2. At the expiration of a period of 12 months after the date on which the money is paid, Public Trust must, after deduction of any amount required to meet the claim of any person which is established within that period, pay the balance into an account entitled the Liquidation Surplus Account for distribution in accordance with this section.

  3. Money held in the Liquidation Surplus Account may be invested in accordance with the Trusts Act 2019, and interest on any investment must be distributed in accordance with this section.

  4. Money held in the Liquidation Surplus Account may be—

  5. paid or distributed to any person entitled to payment or distribution in the liquidation of a company any money representing the surplus assets of which has been credited to the Account; or
    1. paid, subject to such conditions as the Official Assignee for New Zealand may impose, in meeting the claims of the creditors of a company in the liquidation of which the Official Assignee or any other person is the liquidator, for payment of the costs of proceedings in the liquidation after the commencement of the liquidation, legal or other expert advice, or the costs of any expert witness, where the Official Assignee for New Zealand is satisfied that it is fair and reasonable for those costs to be met out of the Account.

      1. Payments from the Liquidation Surplus Account shall be made by Public Trust at the direction of the Official Assignee for New Zealand.

      2. In making a payment under this section, Public Trust is not required to ascertain that money or sufficient money was received on account of any company to which the claim for payment relates.

      3. Nothing in the Unclaimed Money Act 1971 applies in relation to money to which this section applies.

      Compare
      • 1955 No 63 s 330A
      • 1989 No 101 s 12
      Notes
      • Section 316(1): amended, on , by section 170(1) of the Public Trust Act 2001 (2001 No 100).
      • Section 316(1): amended, on , by section 17 of the Companies Amendment Act 1998 (1998 No 31).
      • Section 316(2): amended, on , by section 170(1) of the Public Trust Act 2001 (2001 No 100).
      • Section 316(3): amended, on , by section 161 of the Trusts Act 2019 (2019 No 38).
      • Section 316(5): amended, on , by section 170(1) of the Public Trust Act 2001 (2001 No 100).
      • Section 316(6): amended, on , by section 170(1) of the Public Trust Act 2001 (2001 No 100).