A Court may order a company be wound up and will appoint an Official Liquidator to act.
This order may be made for a number of reasons, including:
- The company is insolvent
- The directors have not acted in the best interest of the shareholders of the company
- The Court considers that the interests of the shareholders, creditors or public are best served by this action
The Court action may be requested by any of the following:
- A creditor
- A shareholder
- A director
- The Australian Securities and Investments Commission
- The company itself
The Liquidator assumes full control of the company’s affairs including taking possession of the company’s assets and displacing the directors.
The Liquidator realises the assets, with any surplus funds being distributed to creditors.
Once the creditor’s claims are met, any surplus funds are distributed to the members of the company in accordance with the company’s Constitution.
The Liquidator has the power to sue the directors for insolvent trading and can have transactions undertaken prior to his or her appointment voided.
Any payments made to a creditor within the prior 6 months of the appointment, when the company was insolvent, may be recovered from the creditor.