15.12 Appointment, powers ,and duties of liquidators

15.12 APPOINTMENT, POWERS AND DUTIES OF LIQUIDATORS

Appointment

1. Members’ Voluntary Liquidation (MVL):

In an MVL, the shareholders appoint a liquidator through a resolution passed at a general meeting of the company. The liquidator must be a licensed insolvency practitioner.

2. Creditors’ Voluntary Liquidation (CVL)

In a CVL, the directors convene a meeting of the shareholders to propose the liquidation, and the shareholders pass a resolution to appoint a liquidator. The liquidator must be a licensed insolvency practitioner.

3. Compulsory Liquidation

In compulsory liquidation, the court appoints a liquidator, who is often an official receiver or a licensed insolvency practitioner.

Powers and duties

1. Investigation and asset realization

Liquidators have the power to investigate the company’s affairs, examine its books and records, and determine the company’s assets and liabilities.

2. Collection and distribution of funds:

Liquidators collect funds from the sale of the company’s assets, outstanding debts, or any legal actions pursued on behalf of the company.

3. Communication and reporting:

Liquidators communicate with creditors, shareholders, employees, and other stakeholders regarding the progress of the liquidation.

4. Legal proceedings:

Liquidators have the power to initiate or defend legal actions on behalf of the company, if necessary, to recover assets or pursue claims against third parties.

5. Investigations and reports on directors’ conduct:

Liquidators may investigate the conduct of the company’s directors, particularly if there is suspicion of wrongful or fraudulent trading.