What's the difference between receivership and liquidation in NZ?
Short answer
Liquidation winds the company down: a liquidator realises assets and pays creditors (often pennies on the dollar). Receivership is usually triggered by a secured creditor (bank, finance company) appointing a receiver to manage the company's assets — sometimes to restructure and continue trading, sometimes to wind down. A company can be in both at once. Either is a serious signal for anyone considering hiring that company.
Source: Companies Act 1993 Part 16. Updated May 2026.
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Check a builderKey facts
- Liquidation = winding down, ending the company
- Receivership = secured creditor controls assets, may continue trading
- Both published in NZ Gazette
- Companies Act 1993 (liquidation) + Receiverships Act 1993
- A company can be in receivership and liquidation at the same time
Receivership in plain English
A bank (or other secured creditor) has lent the company money against security. The company defaults. The bank exercises its right to appoint a receiver. The receiver takes control of the secured assets and decides what to do — sell, restructure, or wind down.
Sometimes the company continues operating under the receiver's control. Sometimes it doesn't. Either way, ordinary trading decisions move from the directors to the receiver.
Liquidation in plain English
The company is ending. The liquidator's job is to realise assets, identify creditors, and distribute whatever's left in legal priority order.
Liquidation can be voluntary (shareholders decide to wind up) or compulsory (court orders it on creditor application). Either way the company effectively stops trading and creditors line up.
What it means if you're mid-build
Receivership: your contract might continue under the receiver, or might not. Talk to the receiver immediately. Don't pay further claims until you have clarity.
Liquidation: contract effectively terminated. You become an unsecured creditor. Recovery is unlikely; insurance via Master Build / Halo / Stamford / Builtin is your real protection.
Knowing the rules is half the job. The other half is knowing who you're hiring. Check any NZ builder against the public record: company status, licensing and insolvency notices, from the official NZ sources.
Related questions
Sources: Companies Act 1993 Part 16; Receiverships Act 1993. General information for NZ homeowners, not legal advice. Building rules change and vary by council, so confirm critical details on the official source before acting. Last updated 2026-05.