{"id":4924,"date":"2020-03-16T17:33:11","date_gmt":"2020-03-16T12:03:11","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=4924"},"modified":"2021-01-29T15:38:15","modified_gmt":"2021-01-29T10:08:15","slug":"removal-and-replacement-of-liquidator","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/removal-and-replacement-of-liquidator\/","title":{"rendered":"Removal and Replacement of Liquidator: A Complete Summary"},"content":{"rendered":"\n<p><strong><em>According to Section 275 of Companies Act, 2013, provides for the Appointment of Liquidator in the Company.<\/em><\/strong>&nbsp;The Company Liquidator is appointed to bring concord and balance between the Company and Creditors of the Company. Sometimes, in a Company on account of some grounds, the Tribunal can Remove and Replace the Company Liquidator.&nbsp;<strong><em>Under Companies Act, 2013, Section 276 provides for the Grounds on which the Company Liquidator can be Removed and Replaced by the Tribunal.<\/em><\/strong>&nbsp;<em><strong>Section 276 of Companies Act, 2013<\/strong><\/em><sup><a href=\"http:\/\/mca.gov.in\/SearchableActs\/Section276.htm\">[1]<\/a><\/sup><strong><em>,<\/em><\/strong> brings responsibility and liability in the performance of the Company Liquidator. In this article, we will discuss the Removal and Replacement of Liquidator.&nbsp; &nbsp; &nbsp;&nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/removal-and-replacement-of-liquidator\/#What_is_the_Role_of_Liquidator_in_Company\" >What is the Role of Liquidator in\nCompany?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/removal-and-replacement-of-liquidator\/#What_are_the_Grounds_for_Removal_and_Replacement_of_Liquidator\" >What\nare the Grounds for Removal and Replacement of Liquidator?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/removal-and-replacement-of-liquidator\/#How_the_Removal_and_Replacement_of_Liquidator_are_done_in_Company\" >How\nthe Removal and Replacement of Liquidator are done in Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/removal-and-replacement-of-liquidator\/#What_are_the_Key_Considerations_for_Removal_and_Replacement_of_Liquidator\" >What\nare the Key Considerations for Removal and Replacement of Liquidator?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/removal-and-replacement-of-liquidator\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Role_of_Liquidator_in_Company\"><\/span>What is the Role of Liquidator in\nCompany?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A Company can be\nplaced into Liquidation by \u2018court order\u2019 or by \u2018resolution of creditors\u2019 in a\nmeeting. For the process of Liquidation to get started, a Company Liquidator is\nappointed in the Company.&nbsp;<strong><em>The Appointment of Company Liquidator is\nmade according to the rules prescribed in Section 275 of Companies Act, 2013.<\/em><\/strong>&nbsp;The\nCompany Liquidator is appointed in Company for:<\/p>\n\n\n\n<ul><li><strong><em>Investigation in the Company\u2019s financial affairs<\/em><\/strong><\/li><li><strong><em>Establishment of the cause of  failure&nbsp;&nbsp;<\/em><\/strong><\/li><li><strong><em>Examination of any possible offences by the Directors of Company or the Company.<\/em><\/strong><\/li><li><strong><em>Identification and Sale of  Assets of Company<\/em><\/strong><\/li><li><strong><em>Maximizing Return for Creditors<\/em><\/strong><\/li><\/ul>\n\n\n\n<p>The Company Liquidator\nensures that there is the Company does an equitable distribution of assets to\nthe creditors of the Company. The Liquidator should act in the best interest of\nall the creditors, rather than favouring specific groups of the Company. &nbsp;If the Liquidator does not work as per the\nrules prescribed by law, the Tribunal can go for Removal and Replacement of\nLiquidator. The company Liquidator should not be biased for specific Director,\nemployee or shareholder of the Company. The Company Liquidator should have a\nreasonable and determined goal to work for the best interest of the Company and\nCreditors of the Company. &nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Grounds_for_Removal_and_Replacement_of_Liquidator\"><\/span>What\nare the Grounds for Removal and Replacement of Liquidator?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The\nCompanies Act, 2013, under Section 276<\/em><\/strong>\nprovides for the grounds for Removal and Replacement of Liquidator. <strong><em>Section\n276 of Companies Act, 2013, states the following grounds:<\/em><\/strong><\/p>\n\n\n\n<ul><li>Misconduct<\/li><li>Fraud and\nMisfeasance<\/li><li>Failure in\nexercising Due Care and Diligence in performing his Powers and Duties<\/li><li>Professional\nIncompetence<\/li><li>Inability to act\nas Company Liquidator or Provisional Liquidator <\/li><li>Lack of\nIndependence Conflict of Interest during his\/her term of Appointment which\nwould justify Removal<\/li><\/ul>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"580\" height=\"345\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-32.png\" alt=\"Grounds for Removal and Replacement of Liquidator\" class=\"wp-image-4925\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-32.png 580w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-32-300x178.png 300w\" sizes=\"(max-width: 580px) 100vw, 580px\" \/><\/figure><\/div>\n\n\n\n<p>Sometimes\nthere can be cases when Company Liquidator acts partially between shareholders,\ncreditors, employees and directors. The Liquidator should always work in the\nbest interest of creditors and the Company. A Liquidator has the power\nto take action against current or previous company directors who did not act in\nthe best interests of shareholders.\nThe main guiding principle must be\nthat the Liquidator should be and be seen to be independent. No personnel interest\nof Company Liquidator should come in between while working in the Company. &nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_the_Removal_and_Replacement_of_Liquidator_are_done_in_Company\"><\/span>How\nthe Removal and Replacement of Liquidator are done in Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The Removal and Replacement of Liquidator can be done in the following ways:<\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-37.png\" alt=\"the Removal and Replacement of Liquidator is done in Company\" class=\"wp-image-4953\" width=\"584\" height=\"380\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-37.png 577w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-37-300x195.png 300w\" sizes=\"(max-width: 584px) 100vw, 584px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Removal\nby Resignation<\/h3>\n\n\n\n<p><strong><em>Under\nthe Companies Act, 2013, the Company Liquidator can be removed if he\/she\nresigns from the position.<\/em><\/strong>\nTo resign the Company Liquidator can summon up a meeting and submit his\/her\nresignation in the meeting. The Tribunal can transfer the assigned work of the\nearlier Liquidator to another Company liquidator.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Removal\nby Creditors<\/h3>\n\n\n\n<p><strong><em>The\ncreditors when thinks that the Company liquidator is guilty of any of the\ngrounds mentioned in Section 276 of the Companies Act, 2013, can go for the\nRemoval and Replacement of Liquidator.<\/em><\/strong>\nIn case of Removal of Company Liquidator, the Tribunal can assign the work of\nearlier Liquidator to another Company Liquidator. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Removal\nby Death<\/h3>\n\n\n\n<p>The Death of Company Liquidator will vacate the office of the Liquidator in the Company. The Tribunal in case of death of Company Liquidator can transfer the work assigned to him\/her to another Company Liquidator. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Removal\nby Central Government<\/h3>\n\n\n\n<p><strong><em>According to Section 275 of Companies Act, 2013, the Central Government can appoint a Company Liquidator.<\/em><\/strong> The Central Government on account of any of grounds mentioned in <strong><em>Section 276 of the Companies Act, 2013<\/em><\/strong>, can remove the Company Liquidator. The Central Government before the Removal of Liquidator should provide him\/her a reasonable opportunity of being heard.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Key_Considerations_for_Removal_and_Replacement_of_Liquidator\"><\/span>What\nare the Key Considerations for Removal and Replacement of Liquidator?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>There\nare some key considerations which should be looked during Removal and\nReplacement of Liquidator:<\/em><\/strong><\/p>\n\n\n\n<ul><li>There should be\nreasonable cause shown for the Removal and Replacement of Liquidator.<\/li><li>The reasons\ngiven should be recorded in writing for the Removal and Replacement of\nLiquidator.<\/li><li>If the Tribunal\nthinks the Company Liquidator has caused loss to the Company by conducting\nfraud or misfeasance or failure to exercise due care and diligence while\nperforming his powers and duties, the Tribunal can recover the loss or damages\nfrom the Company Liquidator. <\/li><li>The Tribunal can\npass orders as it may think fit for the recovery of loss done by the Company\nLiquidator.<\/li><li>The Tribunal\nshould give a reasonable opportunity of being heard to the Company Liquidator. <\/li><li>The Removal and\nReplacement of Liquidator should be done with properly written and recorded reasons\nfor such Removal and Replacement of Liquidator.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Company Liquidator is an agent of Company and trustee for the body of creditors of the Company. The Company Liquidator should work in accordance with the rules prescribed in the Companies Act, 2013. The Liquidator should take due care of the interest of the shareholders. The Liquidator if not follows the rules prescribed, can be Removed and Replaced by the Company. The process of Removal and Replacement of Liquidator is long-lasting and time-consuming. We at <a href=\"https:\/\/corpbiz.io\/\"><strong>Corpbiz<\/strong><\/a> have experienced experts to help you with the process of Removal and Replacement of Liquidator. Our professionals will assist and help you with the successful completion of your process.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important\"><a href=\"https:\/\/corpbiz.io\/learning\/new-winding-up-companies-rules-2020-under-companies-act-2013\/\">New Winding Up Companies Rules (2020) under Companies Act 2013<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to Section 275 of Companies Act, 2013, provides for the Appointment of Liquidator in the Company.&nbsp;The Company Liquidator is appointed to bring concord and balance between the Company and Creditors of the Company. Sometimes, in a Company on account of some grounds, the Tribunal can Remove and Replace the Company Liquidator.&nbsp;Under Companies Act, 2013, [&hellip;]<\/p>\n","protected":false},"author":16,"featured_media":4930,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[385],"tags":[402],"acf":{"service_id":"70"},"authorName":"Sakshi Sharda","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/sakshi-sharda.jpg","authorDescription":"Sakshi Sharda has done BBALLB(HONS) and holds a strong knowledge on the matters pertaining to finance and law. From the past one year she is working as a legal advisor and in her leisure time she works on improvising her knowledge. Sakshi is spreading her knowledge by writing for Corpbiz.","postViews":18358,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/4924"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=4924"}],"version-history":[{"count":20,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/4924\/revisions"}],"predecessor-version":[{"id":25192,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/4924\/revisions\/25192"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/4930"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=4924"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=4924"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=4924"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}