The job of a liquidator is to ensure that a business has enough cash on hand to continue to operate, even if it has to pay out liquidations.
However, many companies have found it hard to do so due to the lack of legal and regulatory clarity around liquidators and their responsibilities, such as the requirement to keep their customers informed of the status of liquidators, and the fact that they must report losses and recover the funds in liquidations themselves.
Liquidators have been forced to do all of these things themselves, or risk being prosecuted.
In order to be able to operate as liquidators in Australia, the liquidators of the day had to follow a set of guidelines set by the Australian Securities and Investments Commission (ASIC).
These guidelines, known as the Liquidation Guidelines, are designed to help ensure that the companies listed in the ASIC register, or which have a registered business in Australia (called a registered entity), have sufficient cash on their books.
Liquidation guidelines in the 2018 ASIC Operating Handbook provide an overview of the role of liquidator and how they can comply with their role.
The guidelines include a list of some of the things liquidators have to do to ensure the liquidation process is orderly and that they get all of their money.
These include ensuring that the liquidator has enough money to complete liquidations and that liquidators are properly compensated.
These guidelines are designed in such a way that they allow companies to make sure that their liquidations are fair and that all of the liquidations go to the liquidated entities.
They also provide a way to ensure liquidators follow the law, which means that the ASI will have the power to enforce liquidation guidelines if they believe that liquidation is not in the best interests of the company or the industry.
The ASI also has the power, through the ASIC, to enforce the Liquidators and Liquidators Registration Act 2006 (LAIR) which requires that the registered companies should be registered.
Liquidator and Liquidator Registration Act 2018: What does it say?
The Liquidators Act 2006 sets out the requirements for the liquidating companies to register with the ASIC and ensure that they comply with the requirements of the Liquidator Register.
This Act requires that liquidator companies must: meet the registration requirements of all of ASIC’s Registered Entities and all of its related functions (including, for liquidators registered under the Liquidations Register Act 2018, to register under that Act) and conduct their liquidation in a manner that is not likely to affect the liquidity of the entity and which complies with all the provisions of the Register and the Liquiders Register Act.
Liquidate all of your business’s cash, and ensure you have enough cash to liquidate the business for at least three years.