Under the Corporations Act 2001 (Cth) (the Act), liquidators have extensive powers to obtain information about the company’s affairs.
The liquidator’s authority to access records is designed to ensure they can properly investigate the company’s financial position, realise assets, and report to creditors and regulators.
When a client’s company enters a creditor’s voluntary liquidation or court liquidation, accountants are often among the first professionals contacted by the appointed liquidator. While the director of the company bears the primary responsibility for cooperation, accountants also have legal and professional obligations to provide the company’s books and records in their possession.
Do I have to comply with a liquidator’s request for books and records?
Yes. Accountants have a legal obligation — not just a professional courtesy — to deliver those records to the liquidator upon request.
The obligations of accountants in this situation are governed by the following sections of the Act, which allow a liquidator access to a company’s books and records:
Section 530A – Assistance to the Liquidator. This section requires any person who has possession of the company’s property, books, or records — not just directors — to deliver them to the liquidator and to provide reasonable assistance in the winding-up.
Section 530B – Offence for Non-Compliance. A person who fails to comply with a request from a liquidator may commit an offence. This includes accountants or external advisers who retain client records.
What books and records are required to be provided?
The term “books” in the Act is broad, however, for accountants it generally includes:
Financial statements, general ledgers, and trial balances
Tax returns, BAS statements, and supporting documentation
Bank reconciliations and transaction listings
Source data or digital files (e.g., MYOB, Xero, QuickBooks)
Audit or review documentation (where applicable)
A liquidator’s request will normally be for the company’s books and records for the past three years, however, in some cases, if there are relevant matters to investigate, a longer period may be requested.
Accountants often question whether they are obliged to hand over their own working papers. The distinction is important:
Client-owned records, such as ledgers, trial balances, and statutory financial statements, belong to the company and must be provided to the liquidator.
Accountant-owned working papers, such as internal analysis or file notes, remain the property of the firm.
However, if those working papers contain essential company information that is not available elsewhere, the liquidator may reasonably request copies or extracts.
To avoid disputes, it’s best to review your engagement letter and ensure it clearly outlines ownership and access rights in line with APES 305 – Terms of Engagement.
What about my unpaid fees?
While accountants may hold a common law lien over client documents for unpaid fees, however, this right does not extend against a liquidator, and it is not possible to refuse to provide records due to having unpaid fees.
While an accountant cannot withhold records, it is still possible to claim unpaid fees through the liquidation process by lodging a proof of debt as a creditor.
Who attends to the preparation and lodgement of any outstanding BASs and income tax returns?
This is a question that gets asked quite often, and there is a general assumption that once a company is placed into a creditor's voluntary liquidation or court liquidation, all outstanding tax lodgements will need to be attended to. However, this is not necessarily the case.
The position will depend upon whether there are sufficient realisations made in the liquidation to enable a dividend to be paid to unsecured creditors. If so, a liquidator is required to obtain a tax clearance from the ATO before distributing any funds to creditors. In order to obtain a tax clearance, the liquidator must ensure that all outstanding ATO lodgements are brought up to date, including:
· BASs and IASs up to the date of liquidation
· Income tax returns
· Fringe benefits tax returns
· Annual payment reports
In most cases, the liquidator will look to engage the company’s existing accountant to prepare any outstanding returns, and the liquidator will agree a fee with the accountant to undertake this work, which will be paid from the funds available in the liquidation.
The above should be contrasted with an individual who goes bankrupt. In those circumstances, a bankrupt individual is still required to lodge any outstanding income tax returns and continue to lodge income tax returns during their bankruptcy and beyond. It should be noted that this is an obligation which falls to the bankrupt (and not the bankrupt’s Trustee in bankruptcy).
Conclusion
When a company goes into liquidation, the appointed liquidator effectively steps into the shoes of the directors and assumes control of all company records.
Under the Act, accountants who hold those records are legally obliged to provide them and to assist the liquidator as reasonably required.
Accordingly, accountants should consider taking the following steps once a request is received from a liquidator to provide books and records held for a corporate client:
Verify the liquidator’s appointment (ASIC notice or Form 505).
Acknowledge the request promptly and in writing.
Provide all relevant records and retain a copy for your file.
Seek legal advice if there is uncertainty over privilege or ownership.
