220 Practical approaches in the appointment of a receiver

Practical procedures in the appointment of a receiver

1. Within seven days of the appointment of a receiver, notification of the appointment must be made using Form 59 and to be lodged by the person who obtains the order (in a court appointment) or by the person making the appointment (in a private appointment) (Section 186(1) CA).

2. Where a receiver or manager of the property of a company is appointed, he/she must send notice to the company of his/her appointment (Section 188(1) (b) CA).

3. Within 14 days after receiving the notice of appointment from the receiver, the company must make out and submit a statement of affairs to the receiver.

4. This statement must follow the format as prescribed in Form 61. The primary responsibility for the making out, submission and verification of the statement rests on one or more of the directors and the secretary, within 14 days of notice of appointment or such longer period which may be allowed by the court.

5. Section 189 CA makes special provisions for this statement:

a. date – the statement must show the required particulars as at the date of the receiver’s appointment

b. assets, liabilities – the statement must show the particulars of the company’s assets, debts and liabilities

c. creditors – the statement must give the names and addresses of all the company’s creditors, the securities held by them respectively and the dates when the securities were respectively given

d. verification – the statement must be submitted by and verified by affidavit (Section 189(2)) of one or more persons who were at the date of the receiver’s appointment, directors of the company and by the person who was at that date the secretary of the company. Alternatively, the receiver may require the submission of the statement and its verification by such of the following (as he/she shall require):

i. persons who are or have been officers

ii. persons who have taken part in the formation of the company at any time within a year before the date of the receiver’s appointment

iii. persons who are in the employment of the company or who have been in the employment of the company within that year, and are, in the opinion of the receiver, capable of giving the information required

iv. persons who are or have been within that year officers of or in the employment of a corporation which is (or within that year was) an officer of the company to which the statement relates.

e. payment – any person making the statement and statutory declaration shall be allowed and shall be paid by the receiver such costs and expenses incurred in and about their preparation and making as the receiver may consider reasonable. Such payment as is due hereunder is to be made by the receiver “out of his receipts”. There is an appeal to the court against the receiver’s decision as to what is reasonable.

f. receiver’s comment – within a month of the receiving the statement of affairs by the receivers, the receiver is bound to lodge a copy to the Registrar with any comments it there is (Section 188(1)(c)(i)). The receiver must at the same time send a copy of those comments to the company. If the receiver has not seen fit to make comments on the statement of affairs, he/she must give notice to that effect to the company at the same time he/she files the copy statement.

6. Every invoice, order for goods or business letter issued by or on behalf of the corporation or the receiver or manager (or the liquidator) which is a document on which or in which the corporation’s name appears, must contain a statement that a receiver or manager has been appointed. Such statement must appear immediately following the name of the corporation, e.g., CA Examples Sdn. Bhd. (Receiver appointed) or CA Examples Bhd (In Receivership).

 

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Practical approaches in the appointment of a receiver Copyright © 2011 by Wawasan Open University. All Rights Reserved.

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