Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What role does the Official Receiver play in the process of compulsory winding up?

1. They represent the creditors

2. They are the appointed liquidator

3. They can petition for liquidation

4. They advise the company on restructuring options

The correct answer is: They can petition for liquidation

The Official Receiver plays a crucial role in the process of compulsory winding up, primarily as the appointed liquidator. When a company is forced into liquidation, the Official Receiver takes on the responsibility of managing the winding-up process. This role includes gathering and realizing the company's assets and distributing the proceeds among creditors. It's important to note that the Official Receiver acts in a neutral capacity, ensuring that the process is carried out according to the law and that the rights of all stakeholders, including creditors, are considered during the liquidation. Their duties could involve investigating the company's affairs, but they do not act on behalf of any party. Instead, they function as an impartial officer of the court, rather than representing creditors or providing advice on restructuring, which are not part of their mandate in the winding-up process. Thus, the correct understanding of the Official Receiver's role aligns with their designation as the appointed liquidator in compulsory winding up.