What happens during receivership

An overview of the receivership process

If your company is unable to pay its debts to a secured creditor, it may be forced into receivership, where a receiver is appointed to deal with secured assets.

What receivership means

A secured creditor can appoint a receiver to collect and sell 1 or more of your company assets over which they have a financial claim.

For example, you may have offered equipment or machinery as security against a loan. If you don't repay the loan on time, a receiver can be appointed to sell off that asset — known as a secured asset — to repay the creditor.

In New Zealand receiverships are managed under the Receiverships Act 1993.

Appointing a receiver

A receiver is appointed:

  • under the terms of a deed of agreement, which is a binding agreement between your company and creditors setting out how you will repay your debts, or
  • by a court.

More than 1 secured creditor can request the appointment of a receiver, and more than 1 receiver can be appointed to act at a time. If 2 or more receivers are appointed, they may act jointly or individually.

Once appointed, a receiver must file a notice of appointment with the Registrar of Companies and give public notice of their appointment.

Once a notice is filed, the status of your company on the Companies Register is changed from Registered to In receivership.

The role of a receiver

A receiver, who is usually an insolvency expert:

  • collects and sells 1 or more secured assets on behalf of a secured creditor, and
  • manages other preferential claims against your company, such as unpaid wages and amounts owing to Inland Revenue.

Preferential claims are paid before those of secured creditors.

A receiver also prepares and files reports with us on the status of, and activities conducted, during the receivership.

Your responsibilities as a director

As a director of a company in receivership, you remain in office but have restricted powers.

You must:

  • cooperate with the receiver so that the financial and business affairs of your company can be resolved fairly and equitably, and
  • provide your company's accounts, records and any other information the receiver requires.

When receivership ends

Receivership ends when we receive:

  • notice from the receiver that the receivership has ended, and
  • a final report from the receiver on the activities and outcomes of the receivership.

Once these documents have been filed, and provided there are no other receiverships continuing, your company's status on the Companies Register is changed from In receivership to Registered.

Filing annual returns

You don't need to file annual returns while your company is in receivership. Once the receivership ends, you must file your next and future annual returns as they become due.

Related pages

All help topics

Before you start a company 5 guides

Get an overview of how companies are structured, find out about the company records you need to keep, and what's involved when you incorporate with and report to the Companies Office.

Shares and shareholders 7 guides

When you incorporate, you must provide details of all company shares and shareholders. As changes occur, you must update this information on your own share register and in your company's annual return.

Company directors 7 guides

Directors have responsibilities to their company and shareholders, and under the Companies Act 1993. You must register all your directors with the Companies Office and they must sign a consent form.​

Filing annual returns 7 guides

Find out about filing an annual return — the information you need to update, how to change your filing month or request a time extension — and what happens if you don't file your annual return by the due date.

Complying with the law 11 guides

Financial reporting 7 guides

Restoring a company to the register 4 guides

Only some companies can be reinstated to the Companies Register once they've been removed. Find out who can apply, what evidence to provide and if you should apply to the Registrar or the High Court.

Getting support to use the Companies Register 6 guides