Once the winding-up of the company has started, the liquidator will take custody and control of all the company’s property. The liquidator will then manage the company’s assets and replace the directors. The company will stop trading, unless the liquidator believes that continuing will benefit the winding-up of the company. The corporate personality of the company remains in existence until dissolution, and property remains vested in it. There is also a stay of actions and proceedings against the company upon the appointment of a provisional liquidator or when a winding up order has been made.
A liquidator is an officer of the court in a compulsory winding up and an agent for the company in a voluntary winding up. His functions are to secure that the company’s assets are got in, realised and distributed to the company’s creditors and, in discharging his function, he is required to ascertain the wishes of the creditors and contributories, and if necessary, apart from the calling of meetings of creditors and contributories, directions may be sought from the court. Certain provisions in the Companies Ordinance will invalidate certain transactions if they infringe the rules of equal and pari passu distribution in the insolvency regime. Certain other provisions in the Companies Ordinance also seek to increase the estate of the company for the purpose of distribution. The liquidator can use these provisions to ascertain whether the company has any claim against its officers or related parties, and he may bring legal proceedings against them to recover damages or the company’s property for the benefit of the creditors.