Business in difficulty?
If it is becoming increasingly difficult for a company to pay its debts as they fall due, then steps need to be taken to avoid the company getting into further financial difficulty. There are several options available to a company in this position.
A company may close for many reasons including ceasing trading or going into receivership or liquidation. Liquidation describes the situation where a liquidator manages the business and primarily sells the assets of a business to pay off debts.
Receivership is an appointment under the terms of a security or by a Court to realise assets or manage the business of a company for the benefit of the security holders.
The process of ‘voluntary administration’ is a relatively new business rehabilitation scheme that was introduced into New Zealand company law on 1 November 2007.