An official who supervises the winding-up of a company. He takes over the company's property, though it does not vest in him unless a court says so. He acts rather as a receiver and manager. Generally speaking, he does anything necessary to conduct the winding-up: inter alia, calling meetings where necessary; fixing a date for the proof of debts, admitting or rejecting proofs; settling lists of contributories; making calls; and disclaiming property. If the company is insolvent, the committee of inspection settles his remuneration. otherwise the members of the company do.
The liquidator's powers and duties vary according to whether the winding-up is compulsory or voluntary. If compulsory, he is subject to court control (and the court or the Department of Trade and Industry can remove him at any time, for instance if he becomes bankrupt, and can appoint additional liquidators if necessary). He is also subject to the control of the committee of inspection on questions of (1) bringing or defending actions in the company's name. (2) carrying on the company's business, (3) paying any class of creditors in full, (4) () contributories, or (5) appointing a solicitor. The liquidator must advertise his own appointment and that of the committee of inspection. He must report to the Registrar of Companies on the progress of liquidation, at the end of the first year and after each subsequent six months. If he carries on the business of the company, he must keep a separate trading account which is regularly audited by the committee of inspection. Creditors and contributories have certain rights to inspect books and receive summaries of accounts. The liquidator must give notice of winding-up to creditors, and tell them when proofs must be lodged if they are to receive a share of the dividend (i.e. distribution). He declares dividends to creditors by giving not more than two months' notice to the Department of Trade and Industry, sending a list of proofs. The liquidator must pay all monies into the company's liquidation account at the Bank of England, or else as directed by the Department of Trade and Industry. When the liquidation is complete, he applies for his release. Various formalities must be observed. The liquidator must usually give security.
If the winding-up is voluntary, the liquidator is not controlled by the Department of Trade and Industry in quite the same way. He must advertise his appointment, deal with proof of debts and make statements to the Registrar of Companies. Monies, though, need not, be paid into the company's liquidation account unless they are retained for more than six months, or after the dissolution. The liquidator must generally submit some form of accounts for audit and his costs may be taxed.
|Reference: The Penguin Business Dictionary , 3rd edt.|