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Liquidation Services in Auckland and Beyond

When all options have been exhausted, we assist in winding up the business and our liquidation services include:

  • Asset realisation and distributing funds to creditors and shareholders (if any surplus)
  • The liquidator has a duty to unsecured creditors
  • Investigations undertaken into what led to the insolvency
  • Voluntary, court-ordered, and creditor-appointed liquidations

Fixity provides efficient and effective liquidation services to maximise value and ensure the best result possible for stakeholders.

Where a Company finds itself unable to pay off its debts as they fall due, Directors need to consider alternative courses of action, which may involve liquidation. This dire situation occurs when the total money the business is supposed to pay out is more than the money it has available, including the total value of everything it owns. In most cases, it’s up to the company directors to decide to begin the process of closing down the company through liquidation. However, there are other specific situations that can lead to liquidation without needing a direct decision from the directors of the company.

Understanding the different types of liquidation—Voluntary, Creditor-Appointed, and Solvent—can help you make informed decisions based on your company’s situation and financial health. Each type offers distinct benefits and follows a specific process to ensure a structured and legal winding-up of business affairs.

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  • Different appointment options, including Voluntary liquidation, Court appointed liquidation and Solvent liquidation options
  • Consequences of liquidation in NZ for the different appointment types
  • Impact of a liquidation for a Director
  • Compliance with Companies Office requirements (including Liquidation notices)
  • Working with Kiwi businesses when there are IRD arrears for PAYE and GST

Understanding the liquidation process in New Zealand is essential for company directors facing severe financial challenges. Liquidation is a formal procedure initiated when a company becomes insolvent—meaning it cannot meet its financial obligations. Here’s a clear overview of the process:

  • Initiation: Liquidation can be started voluntarily by the company’s directors or through a court order if the company is unable to pay its debts.
  • Appointment of a Liquidator: An independent liquidator is appointed to manage the liquidation process. Their responsibilities include overseeing the sale of the company’s assets and managing creditor claims.
  • Asset Sale: The liquidator collects and sells the company’s assets to generate funds to distribute as per Schedule 7 of the Companies Act 1993.
  • Distribution to Secured and Preferential Creditors: After liquidation costs are accounted for, the net sale proceeds from realising assets may be applied against Secured creditors, such as banks and financiers who hold valid security interests.  This is then followed by preferential creditors, such as employees and IRD, then unsecured creditors, including suppliers and trade creditors.
  • Distribution of Remaining Funds: If there are any funds left after all debts have been settled, they are distributed to shareholders.

Conclusion: Liquidation results in the company ceasing operations. While it marks the end of the business, it ensures an orderly process for resolving financial issues and fairly addressing creditor claims.

For directors, understanding these key aspects of liquidation is crucial in making informed decisions and effectively navigating the complexities of financial distress.

Voluntary liquidation occurs when a company decides to wind up its affairs and cease operations, typically due to financial difficulties or strategic business decisions. This process can be initiated by the company’s shareholders or directors.

The company’s directors or shareholders retain control over the decision to liquidate, allowing them to manage the process of who to appoint according to their preferences.

Avoids some of the costs associated with creditor-appointed processes.

Allows for the orderly sale of assets, which can help maximise returns for creditors.

  • 1. Resolution: The decision to liquidate is made through a resolution by the shareholders or directors.
  • 2. Appointment of Liquidator: A liquidator is appointed by the shareholders or directors to oversee the liquidation process.
  • 3. Asset Realisation: The liquidator sells the company’s assets for the benefit of creditors.
  • 4. Investigations: The liquidator has a duty to investigate what led to the insolvency and whether any potential actions should be taken.
  • 5. Distribution: Debts are paid according to priority (per Schedule 7 of the Companies Act 1993), and any remaining funds (if any) are distributed to shareholders.
  • 6. Deregistration: Once all assets are sold and all funds distributed, the company is formally deregistered from the Companies Office.

If you are a Director or a Shareholder and you are considering Voluntary liquidation, contact us now.

This type of liquidation is often used when a company is unable to pay its creditors and is in financial distress.

Creditor-appointed liquidation benefits

  • Creditor Protection: Ensures that creditors have a say in the liquidation process and that their interests are protected.
  • Legal Oversight: The process is overseen by a liquidator appointed by the creditors, ensuring impartiality and adherence to liquidation provisions set out in the Companies Act 1993.
  • Asset Realisation: The liquidator focuses on maximising the return from the company’s assets to satisfy creditor claims.

Creditor-appointed liquidation process

  • Creditor Petition: Creditors file an application with the court to initiate liquidation proceedings.
  • Court Order: A court order is issued for the company to be liquidated, and a liquidator is appointed by the court or creditors.
  • Asset Realisation: The liquidator takes control of the company’s assets and begins the process of selling them for the benefit of creditors.
  • Distribution: Debts are paid according to priority (per Schedule 7 of the Companies Act 1993), and any remaining funds (if any) are distributed to shareholders.
  • Deregistration: Once all assets are sold and all funds distributed, the company is formally deregistered from the Companies Office.

If you are a Creditor and are considering a Creditor-appointed liquidation, contact us now.

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Solvent liquidation is used when a company is solvent and wishes to cease operations. The company has enough assets to pay off all its debts and liabilities.

If you are a Shareholder and are considering a solvent liquidation, contact us now.

  • Voluntary Process: The process is initiated voluntarily by the company’s shareholders, providing flexibility and control.
  • Efficient Asset Distribution: Assets can be distributed to shareholders or used to wind up the business in an orderly manner.

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  • Tax Advantages: May offer potential tax benefits for shareholders compared to other types of liquidation.
  • Resolution: The company’s directors must confirm that the company is solvent and pass a resolution to liquidate the Company.
  • Appointment of Liquidator: A liquidator is appointed by the shareholders to manage the liquidation process.

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  • Asset Realisation: The liquidator sells the company’s assets and settles any remaining liabilities.
  • Distribution: Any surplus funds after settling liabilities are distributed to shareholders.
  • Deregistration: The company is formally deregistered once all assets are sold and the process is complete.