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256: Duties in relation to records
or “Keeping and sharing company records when closing down a business”
You could also call this:

“Managing company funds during liquidation”

When you’re in charge of managing a company’s money during liquidation, you need to follow some important rules. You must put the company’s money in a bank account at a registered bank. This can be an account in the company’s name or a special trust account.

If you have extra money that’s not needed right away, you can invest it. You can only invest in certain things, like financial products from a registered bank, public securities, or other investments that a court says are okay. If you make any money from these investments, like interest or dividends, you need to put it back into the bank account as soon as you can.

If you use a trust account for the company’s money, you’re responsible for keeping it safe for the people who are legally supposed to get that money.

It’s really important to follow these rules. If you don’t, you might get in trouble and face a punishment. The punishment is explained in section 373(3).

When the law talks about “public security”, it means the same thing as in section 2(1) of the Public Finance Act 1989.

Remember, these rules don’t change what section 260 says. You still need to follow that section too.

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Next up: 257: Duties in relation to final report and accounts

or “Liquidator's final duties before removing a company from the register”
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Part 16 Liquidations
Duties, rights, and powers of liquidators

256ADuties in relation to company money

  1. A liquidator must deposit the money of a company under his or her administration at a registered bank and in—

  2. a bank account to the credit of the company; or
    1. a general or separate trust account.

      1. However, the liquidator may invest, in financial products issued by a registered bank, in a public security, or in any other financial products as authorised by the court, any amount of the company’s money that is—

      2. in the bank account or trust account; and
        1. not required for the time being to meet claims made against the company.

          1. All dividends, interest, and other profits from an investment described in subsection (2) must, as soon as practicable after they are received, be paid into the bank account or trust account.

          2. Money that is deposited in a trust account under subsection (1)(b) must be held by the liquidator on trust for the benefit of the persons legally entitled to that money.

          3. A person who fails to comply with this section commits an offence and is liable on conviction to the penalty set out in section 373(3).

          4. In this section, public security has the same meaning as in section 2(1) of the Public Finance Act 1989.

          5. This section does not limit section 260.

          Notes
          • Section 256A: inserted, on , by section 41 of the Insolvency Practitioners Regulation (Amendments) Act 2019 (2019 No 28).