Appointing a liquidator to wind up a company in insolvency
Court winding-up on the ground of insolvency is a creditor-driven process. A properly framed statutory demand and originating process positions the applicant for appointment of a liquidator and subsequent investigations.
This is an 8-step workflow for winding up a company in insolvency under Part 5.4 of the Corporations Act 2001 (Cth), covering the statutory demand pathway, originating process, and liquidator appointment.
Before you start
- Debt due and payable, undisputed, and at least the statutory minimum
- No genuine dispute or offsetting claim likely to defeat a statutory demand
- Proposed liquidator consent and independence declaration available
- Current ASIC search of the debtor company obtained
The workflow
Assess the debt and alternatives
Assess whether the debt is due and payable, whether a genuine dispute or offsetting claim exists, and whether winding-up or other remedies are commercially preferable.
Serve a statutory demand
Serve a statutory demand in Form 509H at the registered office, stating the amount, verifying affidavit where required, and the 21-day compliance period.
Monitor for set-aside application
Monitor for an application to set aside the statutory demand within 21 days. Prepare responsive affidavit evidence on genuine dispute and offsetting claims.
Rely on presumption of insolvency
Upon failure to comply, rely on the presumption of insolvency under s 459C(2)(a) for proceedings commenced within 3 months.
Prepare originating process
Prepare the originating process under s 459P, supporting affidavit, consent to act, and affidavit verifying the debt and failure to comply with the demand.
File, serve, and advertise
File and serve the originating process, notify ASIC under s 470, and publish the winding-up notice on the ASIC published notices website at least 3 business days before hearing.
Attend first return and any substituted service
Attend the first return, deal with any appearance by the company or other creditor, and seek substituted service or adjournment as required.
Obtain winding-up order and liquidator appointment
Obtain the order that the company be wound up in insolvency and that the nominated practitioner be appointed liquidator. Serve the order and lodge with ASIC.
What you will have at the end
A winding-up order appointing a registered liquidator to the company, triggering statutory investigations and a stay under s 471B.
Common issues
- Statutory demand defective (amount, verifying affidavit, service)
- Set-aside application based on genuine dispute not properly anticipated
- Failure to advertise the winding-up notice within the prescribed window
- Liquidator consent and DIRRI not on file at hearing
- Debtor lodging a voluntary administration just before hearing, derailing the application
Run this workflow on a real matter
Quillio drafts the statutory demand, originating process, and supporting affidavits, and diarises every Part 5.4 step. See /practice-areas/commercial-lawyers or start a free trial.
This workflow is a general guide. Winding-up proceedings can have significant costs and reputational consequences and should be run with specialist insolvency advice.
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Quillio can run this workflow on a real matter, with citations to current AU authority on every step. The free trial requires no credit card.
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