The Company Liquidator

In one line

The Tribunal appoints an insolvency professional as Company Liquidator when it makes the winding up order, he declares any conflict within seven days, takes custody of the company's property, reports to the Tribunal within sixty days on eleven listed matters with a registered valuer's valuation, and may be removed for misconduct, fraud, incompetence, inability or conflict after being heard.

In exam wording: under section 275(1), for the purposes of the winding up of a company by the Tribunal, the Tribunal at the time of the passing of the order of winding up shall appoint an Official Liquidator or a liquidator from the panel maintained under sub-section (2) as the Company Liquidator; and under section 275(2), as substituted, the provisional liquidator or the Company Liquidator shall be appointed by the Tribunal from amongst the insolvency professionals registered under the Insolvency and Bankruptcy Code 2016.

Why the law has this at all

A winding up order does not itself do anything to the company's assets. Somebody must take them, preserve them, realise them and account for them, and that somebody must be independent of the people whose conduct brought the company to the Tribunal.

The Act's answer has four elements, and naming them organises the sections.

Independence. The liquidator is appointed by the Tribunal, not by the company or its creditors; he must declare any conflict of interest or lack of independence within seven days; and he may be removed for conflict as well as for misconduct.

Competence. Since 2016 he must be an insolvency professional registered under the Insolvency and Bankruptcy Code 2016, which brings a regulated profession, an examination and a disciplinary body behind the office.

Control. He takes custody under s.283, but the property is deemed to be in the custody of the Tribunal from the date of the order; he reports under s.281 and periodically under s.288; and the Tribunal fixes the time within which the whole proceeding must be completed under s.282.

And information. The company's people must cooperate under s.284, the books must be handed over under s.274(3), and the liquidator's report must cover the eleven matters in s.281(1) plus the promotion and formation of the company and the viability of the business.

Section 275: appointment

275(1): the Tribunal, at the time of the passing of the order of winding up, shall appoint an Official Liquidator or a liquidator from the panel maintained under sub-section (2) as the Company Liquidator.

275(2), as substituted: the provisional liquidator or the Company Liquidator shall be appointed by the Tribunal from amongst the insolvency professionals registered under the Insolvency and Bankruptcy Code 2016. The sub-section was substituted by s.255 and the Eleventh Schedule of that Code with effect from 15 November 2016, and sub-section (4), which had dealt with the panel of professionals maintained by the Central Government, was omitted by the same provision.