When a company goes into liquidation, a liquidator is appointed to take it from “trading and in trouble” to “closed and deregistered” in an orderly, lawful way. If your company is facing liquidation, understanding what the liquidator actually does, and what powers they have over you and the company, removes a lot of the fear of the unknown.
Who can be a liquidator?
A liquidator is an independent professional registered and regulated by ASIC. They are not the company’s accountant or adviser. They act independently, with duties to creditors and the law, not to the directors.
What a liquidator actually does
Once appointed, a liquidator’s core responsibilities are:
- Takes control of the company. The directors’ powers cease. The liquidator controls the company’s affairs, bank accounts and assets from that point.
- Secures and sells assets. They identify, protect and realise the company’s assets, such as property, plant and equipment, stock, vehicles, and money owed to the company by its own debtors.
- Investigates the company’s affairs. They examine why the company failed and review its records and transactions, including whether the company traded while insolvent, and whether there were unfair preferences or uncommercial transactions that can be recovered for creditors.
- Reports to ASIC and creditors. They report on the company’s affairs and on any possible offences or recoverable claims, and keep creditors informed.
- Distributes funds. They pay out any available money to creditors in the strict statutory order of priority.
- Finalises and deregisters. When the work is done, they finalise the liquidation and the company is deregistered by ASIC.
What this means for directors
The liquidator’s investigation includes the conduct of directors. You have a legal obligation to assist the liquidator and provide information about the company’s business, property and financial affairs. The liquidator can pursue directors personally where, for example, the company traded while insolvent, a director owes money to the company, a director gave personal guarantees, or a Director Penalty Notice has made the director personally liable for unpaid tax. This is one of the main reasons getting advice before liquidation matters, because it is your last chance to understand and manage that exposure.
How does a liquidator get paid?
A liquidator is generally entitled to be paid for the work they do in the liquidation, and their remuneration typically comes from the assets of the company, before distributions to unsecured creditors in the order of priority. Their fees must be approved, for example by creditors or in some cases the court, and they are required to report on their remuneration. In practical terms, the liquidator is usually paid out of what the company has, not out of the directors’ pockets, though where there are few or no assets, how a liquidation is funded becomes an important early question to ask.
Talk to someone before the liquidator is appointed
Once a liquidator is in place, the decisions are theirs, not yours. The window where you still have choices is before that point. de Jonge Read® can explain exactly what a liquidation would mean for you and whether a better option exists, on a free, no-obligation basis.
Call 1300 765 080 or book your free consultation.
Frequently asked questions
What does a liquidator do?
A liquidator takes control of a company in liquidation, sells its assets, investigates its affairs and the conduct of its directors, reports to ASIC and creditors, distributes funds in the order set by law, and finally has the company deregistered.
Who can be a liquidator?
A liquidator is an independent professional registered and regulated by ASIC, with duties to creditors and the law rather than to the company’s directors.
How does a liquidator get paid?
A liquidator is generally paid from the company’s assets, ahead of unsecured creditors, and their fees must be approved by creditors or the court. Where there are few assets, how the liquidation is funded becomes an important early question.
What powers does a liquidator have over directors?
Directors must assist the liquidator and provide information about the company. The liquidator can pursue directors personally for matters such as insolvent trading, loans owed to the company, or personal guarantees given.
A liquidator takes control of a company in liquidation, sells its assets, investigates its affairs and the conduct of its directors, reports to ASIC and creditors, distributes funds in the order set by law, and finally has the company deregistered.
Who can be a liquidator?
A liquidator is an independent professional registered and regulated by ASIC, with duties to creditors and the law rather than to the company’s directors.
How does a liquidator get paid?
A liquidator is generally paid from the company’s assets, ahead of unsecured creditors, and their fees must be approved by creditors or the court. Where there are few assets, how the liquidation is funded becomes an important early question.
What powers does a liquidator have over directors?
Directors must assist the liquidator and provide information about the company. The liquidator can pursue directors personally for matters such as insolvent trading, loans owed to the company, or personal guarantees given.
This page provides general information only and does not take into account your personal circumstances. It is not legal, financial or tax advice. Please obtain advice tailored to your situation before acting. Last updated: June 2026.