The Liquidator's Powers and Accounts

In one line

The Company Liquidator has fourteen statutory powers, from carrying on the business to selling the undertaking as a going concern and instituting proceedings, all exercisable subject to the Tribunal's directions and overall control; he must have regard to the wishes of creditors and contributories, keep books open to their inspection, report quarterly, and present audited accounts to the Tribunal at least twice a year.

In exam wording: under section 290(1), subject to directions by the Tribunal, the Company Liquidator in a winding up by the Tribunal shall have the fourteen powers the sub-section lists; and under section 290(2), the exercise of those powers shall be subject to the overall control of the Tribunal.

Why the law has this at all

A liquidator has to do two things that pull in opposite directions.

He must act commercially. Realising an estate is a business operation: contracts must be completed or repudiated, a factory may have to keep running so that work in progress can be finished, and an undertaking is usually worth more sold whole than broken up. A liquidator who had to apply to the Tribunal before every act could not do any of it.

And he must be controlled. He is spending other people's money, he was appointed rather than chosen by those affected, and the persons whose property he is realising cannot supervise him.

The Act reconciles the two by giving him wide powers subject to control, and the control operates at three levels.

The Tribunal, whose directions qualify the powers and whose overall control governs their exercise, s.290; and to whom any person aggrieved by any act or decision of the liquidator may apply, s.292(4).

The creditors and contributories, whose wishes he must have regard to, who may direct him to summon meetings, and whose directions override the advisory committee's, s.292.

And the record, through books open to inspection, s.293, quarterly reports, s.288, and audited accounts filed with the Tribunal and delivered to the Registrar, s.294.

Section 290: the fourteen powers

Subject to directions by the Tribunal, the liquidator has power:

(a) to carry on the business of the company so far as may be necessary for the beneficial winding up of the company;

(b) to do all acts and execute, in the name and on behalf of the company, all deeds, receipts and other documents, and for that purpose to use the company's seal when necessary;

(c) to sell the immovable and movable property and actionable claims of the company by public auction or private contract, with power to transfer the property to any person or body corporate, or to sell it in parcels;