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A company may be placed under receivership, if a receiver is appointed to enforce a charge for the benefit of holders of debentures of the company. Receivership is initiated by a holder of a floating charge, usually a bank. 

Who is a receiver?

A receiver is a person who is appointed to collect, protect and receive property and income from property. A receiver may be appointed in respect of a company encompassing its entire business and undertaking, or in respect of a particular asset or assets of the company.

The Court however, may appoint the liquidator as a receiver on behalf of the debenture holders or other of the Company’s creditors if the Company is being wound up by the Court. 

​Receiver is NOT THE SAME as the official receiver

A receiver shall not be qualified to be appointed and act as receiver of a company—

  • A corporation;

  • An undischarged bankrupt; 

  • A mortgagee of any property of the company, auditor, secretary or employee of the company or of any corporation; or

  • Any person who is neither an approved liquidator nor the Official Receiver cannot be an appointed receiver. 

Please refer to section 20 of the Insolvency Order, 2016.