Feb 21,2025

Companies Act Section 84

Comprehensive Explanation of Section 84 of the Companies Act: Intimation of Appointment of Receiver or Manager

Section 84 of the Companies Act establishes the legal framework for the appointment of a receiver or manager in relation to a company’s charged property.

This section mandates that such appointments, whether made by court order or under an instrument granting such power, must be properly communicated to both the company and the Registrar.

The provision ensures that all relevant details are accurately recorded in the register of charges, thereby maintaining transparency and regulatory compliance.

The section is divided into two main subsections, which outline the responsibilities for notifying both the appointment and cessation of a receiver or manager.

Subsection (1): Obligation to Notify Appointment of a Receiver or Manager

Under subsection (1), there is a legal requirement to notify the Registrar and the company whenever a receiver or manager is appointed. The key aspects of this provision include:

1. Circumstances Requiring Notification

The duty to notify arises in the following circumstances:

(a) Appointment by Court Order

When a court issues an order for the appointment of a receiver or manager to oversee the company’s property subject to a charge, the person obtaining the order is obligated to inform both the company and the Registrar.

(b) Appointment Under an Instrument

If a receiver or manager is appointed under the authority of a legal instrument, such as a deed, agreement, or other contractual arrangement, the person making the appointment must also notify the company and the Registrar.

2. Notice to the Company and the Registrar

The individual responsible for obtaining the order or making the appointment must provide formal notice to both the company and the Registrar.

The notice must include:

A copy of the court order (if the appointment is made through judicial proceedings), or

A copy of the instrument that grants the power to appoint the receiver or manager.

3. Timeframe for Notification

The notice must be submitted within thirty (30) days from the date of:

The issuance of the court order, or

The appointment of the receiver or manager under an instrument.

4. Registrar’s Role

Upon receiving the notice along with the required documentation and prescribed fees, the Registrar is required to:

Record relevant details, including references to the court order or instrument under which the appointment was made.

Subsection (2): Obligation to Notify Cessation of Appointment

A similar notification requirement applies when the appointed receiver or manager ceases to hold their position. The obligations in this regard are as follows:

1. Requirement for Notification

When the receiver or manager ceases to act in their appointed role, they must submit a notice to both:

The company, and The Registrar.

2. Registrar’s Role Upon Cessation

Once the Registrar receives notification of the cessation of appointment, they must:

Update the register of charges to reflect that the receiver or manager’s appointment has ended.

Ensure that the company’s official records remain current and accurate.

Key Objectives of Section 84

1. Transparency and Recordkeeping

The provision ensures that the appointment and cessation of receivers or managers are properly recorded in the register of charges.

This enhances corporate transparency and allows stakeholders to have clear visibility of any changes in the management of a company’s charged property.

2. Timely Communication

The requirement to notify within thirty (30) days ensures that all relevant parties, including creditors and regulatory authorities, are informed of changes in a timely manner.

3. Registrar’s Oversight

By maintaining accurate records of appointments and cessations, the Registrar plays a crucial role in compliance enforcement.

The register serves as a reliable source of official information regarding the company’s charges and any related appointments.