Liquidating business nz

25-Mar-2020 22:52 by 9 Comments

Liquidating business nz

Applications by creditors are by far the most important and common.

Remember who your directors and executives were and resolve to avoid in future any companies they may be involved in.

Liquidations are also classified according to whether the company is solvent or insolvent.

If the company is insolvent, this means it is unable to pay its debts as they fall due.

This process starts with an application to the court alleging that one or more of the required grounds exist.

The application may be brought by the company or a majority of its directors, or by the Registrar of Companies, or by a creditor.

The liquidator represents the interests of all creditors.

The liquidator supervises the liquidation, which involves collecting and realising the company's assets (turning them into cash), discharging the company's liabilities, and distributing any funds left over among the shareholders in accordance with the company's constitution (or the COMPANIES ACT 1993 if there is no constitution).In this situation there is potential conflict between creditors (those to whom money is owed), as there will be insufficient assets for all creditors to be paid in full.The law attempts to maintain an equality between creditors, so the assets are distributed proportionately according to the size of each creditor's claim.Liquidation (or "winding up") is a process by which a company's existence is brought to an end.First, a liquidator is appointed, either by the shareholders or the court.Broadly speaking, the liquidation process is as follows: There is a hierarchy that determines the order in which a company's assets must be distributed in a liquidation. Any secured creditors have the first right to the assets and are usually paid out before there is a distribution.