When it comes to any external insolvency and administration matter, there is a need for a registered liquidator as that is the only person that can handle it. A registered liquidator is a natural person registered under the Corporation Act 2001. Open registration they get a registered Liquidator number, and they are added to the list of liquidators in the ASIC register. They usually have complete control of the affairs, assets, and money of a body corporate and act in a fiduciary capacity.
Becoming a registered liquidator
ASIC handles the process of becoming a registered liquidator, and anyone who wants to become one must lodge a physical application. There are only a few applications for this profession; the reason the online application is not allowed. There is a specific format in which the application must be, and you must ensure that yours is in this format. All the required details, explanation, and statements that accompany the application must be in the required form. Once ASIC has accepted your application for lodgement, you will get an invoice of the fee.
It is essential that your application is in the approved format because only those applications would be forwarded to the committee. The committee reviews the application, and if they are satisfied that you meet the requirements, you become a registered liquidator. For you to be registered, you must provide written proof that you hold the appropriate and adequate professional indemnity and fidelity insurance. This is to protect you against liabilities that you may incur in the performance of your duty. Upon registration, you’ll get a certificate, and the registration remains valid for three years until which you have to renew.
There are certain statutory and regulatory obligations binding on a registered liquidator. You must ensure compliance with the rules and fulfil the obligations to remain as a liquidator. The general obligations include that you should be fit and proper, perform your duties properly and adequately, continue to reside in Australia, and not become insolvent. That said, there are specific regulations that you should comply with, and they focus on your obligations as to:
- Annual General meeting and financial reporting
- Lodging documents and reporting matters
- Lodging unclaimed money
- Ensuring that you have appropriate and adequate professional indemnity and fidelity insurance.
There are many more obligations which would vary depending on your condition. All in all, you must act in compliance with the Corporation Act.
As a registered liquidator, you are entitled to relief for certain obligations. This relief which could come as class order or individual relief might mean you can skip certain obligations and not get sanctioned. For instance, some companies, when they are externally-administered, are exempt from annual general meetings and financial report.
You are free to change your liquidator registration or even cancel it altogether. For instance, if specific details such as address change, you can notify ASIC by lodging a particular form to inform them of the change.