Business receivership is a form of external administration, but it has its own distinct meaning. The most important distinction between business receivership in Newport Beach CA and other types of administration is that the legal existence of a company in business receivership is not affected, whereas it is under some other types of external administration. Business receivership in Newport Beach CA occurs when a secured creditor or, at times, the court, appoints an independent receiver to take control of some or all of the assets held by the company.

In general, a receiver can only be appointed when there is a charge held over one or more of the company’s assets, such as a fixed and floating charge or a mortgage. The receiver’s role is a somewhat limited one, in that they have power to collect and liquidate as many of the assets pursuant to the charge as is necessary to repay the debt that is owed to the creditor secured by the charge.

The directors of a company that is in business receivership still remain in office, unlike in the case of other types of external administration. While the directors remain in office, their powers will be limited to the extent as is necessary to allow the independent receiver to perform their task. The limitation of the directors’ powers will depend upon the powers that have been granted to the receiver by the secured creditor or the court, as well as the extent of the assets over which the receiver is appointed.