Why this page exists
When a New Zealand business owner gets into serious trouble, a common first move is to search for “insolvency help”, “business debt help” or “what to do when you can’t pay IRD”. Many of the results come from insolvency practitioners, restructuring advisers and liquidators. Their websites are often warm and reassuring. They talk about relief, fresh starts and taking the pressure off.
That’s not wrong. But it can leave out something important: once a liquidator or administrator is appointed, they take control of the company and their duties run to its creditors. Their fees are paid from the company’s assets, usually before unsecured creditors see anything. And the business you built may be sold or closed.
Sometimes that’s the right path. Often, particularly where the business is still viable and there’s equity in property, there’s another one: get money in, pay your way out, and keep the business.
What does a liquidator actually do?
A liquidator is appointed by the shareholders, the board in some cases, or by the High Court on a creditor’s application. Under the Companies Act 1993, once appointed, the liquidator:
- takes custody and control of the company’s assets;
- stops the directors from exercising their powers;
- sells assets and collects money owed to the company;
- investigates the company’s affairs, including the directors’ conduct;
- pays creditors in the order set by law, after the costs of the liquidation.
Liquidators must be licensed under the Insolvency Practitioners Regulation Act 2019, which has required licensing since 1 September 2020. You can check a practitioner on the Companies Office register.
Who they act for, and how they’re paid
| Question | Liquidator or administrator | You, with a refinance |
|---|---|---|
| Who controls the company? | The appointee | The directors |
| Whose interests come first? | Creditors as a whole | The business and its owners, with creditors paid in full |
| How are fees paid? | From company assets, ahead of unsecured creditors | Loan costs, priced on your circumstances |
| What happens to the business? | Often sold or closed | Keeps trading |
| Can directors be investigated? | Yes, it’s part of the role | Not triggered by a refinance |
None of this is a criticism of the people who do the work. It’s simply how the roles are designed. The problem arises when an owner of a viable business enters a formal process without realising a funding option existed.
The question to ask before any other
Before you sign an appointment, a consent to act, or a resolution to liquidate, ask yourself one question:
If the business had the money to clear its pressing debts, would it be viable?
If the answer is yes, meaning the business covers its running costs and could manage a sensible loan repayment once IRD and the creditors are dealt with, the problem may be a funding problem, not an insolvency problem. And funding problems can have funding solutions.
How we can help instead
- Equity in property? If you or a supporting party own New Zealand property with equity, we can probably help. Property-secured business loans from $20,000 to $1m can pay IRD and creditors directly at settlement, as a first or second mortgage. No financials are needed for the initial assessment, and bad credit and arrears are considered case by case.
- No property? We may still be able to help. Unsecured cash-flow loans and business lines of credit, based on turnover and bank statements, consider weaker credit for businesses trading six months or more.
- Debts everywhere? A complete refinance can roll IRD, creditors and expensive short-term debt into one.
Before you sign anything
If you’re already talking to a practitioner, that’s fine. Use the conversation to learn, and ask the questions in our guide: questions to ask any insolvency practitioner before signing. Then give yourself a day to consider the funding route as well. A short enquiry with us takes about a minute and doesn’t affect your credit score.
Understanding what each option means for control of your business, and for fees, is the whole point. After that, the decision is yours.
Start an enquiry or call 03 667 4222.