Appointing the Liquidator in a Creditors’ Voluntary Winding Up

Appointing a liquidator is the final filing that completes a creditors’ voluntary winding up, and it costs $20 through Bizfile. The substantive point is not the fee. It is that in this type of winding up the creditors choose, and from the moment the liquidator is appointed the directors’ powers cease.

Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.

The company nominates a person at its meeting. The creditors may nominate a person at theirs. Where the two nominations differ, the person nominated by the creditors becomes liquidator. If the creditors nominate nobody, the company’s nominee takes the job. That is section 167 of the Insolvency, Restructuring and Dissolution Act 2018, and it is the single provision that defines this route.

This is the last of three filings. The first, optional one is the declaration of inability to continue, and the second, compulsory one is the notice of resolution. For how the whole process fits together, see our overview of creditors’ voluntary winding up.

Who actually gets to choose the liquidator?

Directors frequently assume that because they started the process, they pick the person who runs it. They do not. They nominate.

The left-hand column is the solvent route, covered in our guide to appointing a liquidator in a members’ voluntary winding up. Everything below assumes the right-hand column.

That last row is worth knowing before the creditors’ meeting rather than after it. Where different persons are nominated, any director, member or creditor may apply to the court within 7 days after the date of the creditors’ nomination for an order that the company’s nominee act instead of, or jointly with, the creditors’ nominee. Seven days is a short window and it runs from the nomination, not from the day the board gets around to discussing it.

The committee of inspection

At the creditors’ meeting, or any later meeting, the creditors may appoint a committee of inspection of up to 5 persons, whether or not they are creditors. If they do, the company may appoint up to 5 more, either at the meeting where the winding up resolution was passed or later in general meeting. The creditors can resolve that any of the company’s appointees should not sit on it, and unless the court directs otherwise, those people are then disqualified.

The committee matters commercially because it is the body that fixes the liquidator’s remuneration and approves the continuance of any directors’ powers. If there is no committee, the creditors do both.

Who may be appointed

Bizfile records the appointee by type: an individual, a local company, an accounting limited liability partnership, an audit firm, an approved insolvency practitioner, or the Official Receiver. That dropdown describes how the appointment is captured, not a relaxation of who may lawfully take it.

Acting as the liquidator or provisional liquidator of a corporation is acting as an insolvency practitioner. A person must not do that except under and in accordance with an insolvency practitioner’s licence, and the statutory carve-outs cover the Official Receiver and the Official Assignee, and a liquidator appointed in a members’ voluntary winding up. A creditors’ voluntary winding up is not on that list.

The practical translation: unless the Official Receiver is taking the appointment, expect the appointee to hold a current insolvency practitioner’s licence, and expect Bizfile to ask for the licence number so that the person’s details can be retrieved.

The filing, step by step

You file through the winding up eService in Bizfile, logged in as a business user through Corppass, or through a corporate service provider appointed to file for the entity. If you have already lodged the notice of resolution, resume the existing process rather than starting a new one, because starting a new process deletes what was saved.

1. Confirm the entity. Check the name and UEN on the top bar against the company you intend to wind up.
2. State the commencement date of the winding up. Current date or earlier. Where a provisional liquidator was appointed before the resolution, commencement is the date the declaration was lodged with the Registrar. Otherwise it is the date the resolution was passed.
3. Say whether you are appointing a liquidator or a provisional liquidator, and give the date of appointment, again current or past.
4. Select the appointee type and enter the identification details, email address and mobile number. For a firm appointee, the firm’s UEN. For an approved insolvency practitioner, the licence number, which retrieves their details.
5. Add further appointees if there are any. Joint appointments are supported and are common where the estate is large or where the court has ordered the company’s nominee to act jointly with the creditors’ nominee.
6. Review, declare and pay the $20 fee.

Two notifications follow: confirmation of the submission, and confirmation that the entity’s status has changed to in liquidation under a creditors’ voluntary winding up. That status is public, and it is the moment the outside world learns what has happened.

What changes the day the liquidator is appointed

All the powers of the directors cease, except so far as the committee of inspection, or if there is none, the creditors, approve their continuance. Directors do not resign, and they are not off the hook. They remain officers with duties to co-operate, to deliver up the books and papers, and to explain the company’s affairs.

The liquidator investigates. Transactions at an undervalue, unfair preferences in the run-up to insolvency and the conduct of the business while it was failing are all in scope, and officers can be examined in court about them: see our note on the public examination of company officers under the IRDA. The duty to have regard to creditors’ interests once a company is in financial difficulty is covered in our piece on financially parlous companies.

The company must also add the words “in liquidation” after its name where the name first appears on invoices, orders for goods, business letters, order forms, other correspondence and on its website. The equivalent for a provisional liquidator is “in provisional liquidation”. Default carries a fine not exceeding $10,000 and a default penalty.

What comes after the appointment

The filings do not stop here. Through the post-initiation winding up service the liquidator files the notice of appointment of a liquidator or provisional liquidator, any notice of cessation, and the account of receipts and payments together with the statement of position in the winding up.

If the winding up runs beyond a year, the liquidator must summon a meeting of the company and of the creditors at the end of the first year and at the end of, or within 3 months after the end of, each following year, and lay before it an account of the liquidator’s acts and dealings. When the affairs are fully wound up, the liquidator makes up a final account, advertises the final meeting in the Gazette and at least one English local daily newspaper at least 30 days beforehand, lodges the return within 7 days after the meeting, and the company is dissolved 3 months after that lodgement.

If the appointed liquidator dies, resigns or otherwise vacates office, the creditors may fill the vacancy, and a meeting for that purpose may be summoned by any two of them. If nobody is acting at all, the court may appoint. Where the problem is the liquidator rather than the vacancy, our note on removing or replacing a liquidator sets out the court’s power.

What goes wrong in practice

Filing the company’s nominee after the creditors nominated someone else. The filing should record the person who is liquidator in law. Where the nominations differed and no court order has been made, that is the creditors’ nominee.

Letting the 7-day court window close. If the board genuinely believes the creditors’ nominee is conflicted or unsuitable, the application must be made within 7 days of the creditors’ nomination. Complaints made in week three are complaints, not applications.

Getting the commencement date wrong. It drives what is void, what is caught as a preference, and which claims count. Where the declaration route was used, commencement is the date the declaration was lodged with the Registrar, not the date of the resolution.

Directors carrying on as before. Signing cheques, chasing debtors, disposing of stock. Their powers have ceased unless the committee of inspection or the creditors have approved otherwise, and acting without authority once a liquidation has begun is exactly the conduct a liquidator is paid to notice.

Nobody telling the bank, the landlord or the customers. The status change is public and the “in liquidation” suffix is compulsory. Discovering it from a supplier’s credit check is a bad way for a counterparty to find out.

Frequently asked questions

Can the directors pick their own liquidator in a creditors’ voluntary winding up?
They can nominate one at the company’s meeting, but they cannot impose one. If the creditors nominate a different person at their meeting, the creditors’ nominee is liquidator. Any director, member or creditor may apply to court within 7 days of the creditors’ nomination for an order that the company’s nominee act instead, or jointly.

What does the appointment filing cost?
$20 through Bizfile, processed immediately. That is the filing fee only. The liquidator’s own remuneration is a separate matter, fixed by the committee of inspection or, if there is none, by the creditors, and paid out of the company’s assets as an expense of the winding up.

Can more than one liquidator be appointed?
Yes. The filing allows additional liquidators or provisional liquidators to be added before submission. Joint appointments are common on larger estates and are also the practical outcome where a court orders the company’s nominee to act jointly with the creditors’ nominee.

Do the directors resign when the liquidator is appointed?
No. Their powers cease unless the committee of inspection or the creditors approve their continuance, but they remain officers of the company. They must co-operate with the liquidator, hand over the books and papers, and answer for how the business was run.

What if we cannot get anyone to take the appointment?
Speak to the insolvency practitioner early, because a licensed practitioner will want comfort that the estate can fund the work. Where from any cause there is no liquidator acting, the court may appoint one. The Official Receiver is also an available appointee type in a creditors’ voluntary winding up.

Where the corporate secretarial work sits

The liquidator runs the liquidation. Somebody still has to run the meetings, the nominations, the committee appointments, the Bizfile filings and the register of what was decided and when. That is the part boards underestimate, and the part a liquidator will ask for on day one.

Raffles Corporate Services handles it alongside the appointed practitioner: the meeting notices and minutes, the nomination records, the appointment filing, and the document set that makes the first month of a liquidation orderly rather than archaeological.

You can reach us through Raffles Corporate Services, or read more on Singapore corporate secretarial practice at Singapore Secretary Services.

The Editorial Team, Raffles Corporate Services