chapter  5
COMPULSORY LIQUIDATIONS
WithTony O’Grady
Pages 10

Companies may be wound up by one of two means: by resolution of the shareholders, known as members’ or creditors’ voluntary liquidation depending on whether the company is solvent or insolvent respectively, or by order of the High Court. This chapter deals with liquidations commenced by order of the court only. The principal differences between voluntary liquidations and liquidations commenced by court order (which are referred to in this chapter as court liquidations) are that, in the case of court liquidations, liquidators are required to obtain leave of the court under s 231 of the Companies Act 1963 (CA 1963) before exercising many of their powers, whereas in voluntary liquidations no such leave is required. (See, however, s 276 CA 1963, which requires voluntary liquidators to obtain the consent of the members in the case of members’ voluntary liquidations and the Committee of Inspection, or if there is no such Committee of Inspection, the creditors’ approval before exercising certain powers.) The Examiner of the court exercises a supervisory role in relation to court liquidations. A court-appointed liquidator is described as an Official Liquidator.