A liquidator or receiver may be appointed to a company to oversee and manage the process of closure. This usually occurs during enforced liquidation, compulsory liquidation, or bankruptcy.
The High Court may decide on the appointment of the liquidator or receiver if the company closure is carried out by judicial decision. It is then deemed to be in the best interests of the public to close the company. An independent person is required to regulate the process and take over from the company directors. The appointment of a company liquidator/receiver effectively renders the directors’ executive powers redundant.
In other circumstances the shareholders and directors make the decision to assign a liquidator/receiver themselves in a general meeting. This marks the start of the company closure in some countries and identifies the process as enforced liquidation, compulsory liquidation, or bankruptcy. In France the minutes of this meeting must be documented and a legal announcement of the liquidator’s position and decision should be published in a national French newspaper.
Occasionally the company directors become the company liquidators. The details and change of role are filed with the companies register and the company directors/liquidators organise the process of closure.
As the company directors have lost all control over the company assets when a liquidator/receiver is appointed, the liquidator/receiver must take responsibility to complete all aspects of closure. Duties of the liquidator/receiver include paying off the company’s debts from remaining assets and managing any remaining liabilities. These do vary with different countries’ legislation.
In France certified copies of the decision for dissolution must be submitted to the commercial register, the tax authorities notified of new status and final accounts submitted, and a closure notice publicized in a national French newspaper. In Ireland the liquidator is responsible for creating a winding up petition for the business and realising the company assets. In Denmark an investigation of the state of the company’s finances must be conducted for liquidation, and in Hungary the liquidator is required to pay off taxes with the State Budget and staff wages.
The liquidator/receiver works in association with the High Court to ensure the process of liquidator or bankruptcy is completed in accordance with legislation. The company being closed down must be sure to comply with the liquidator/receiver’s instructions or requirements to complete legalities and allow the procedure to run efficiently and with little further damage as possible.