If you are a Director of an insolvent company, Oliver Elliot can help you address your concerns arising from the insolvency and Liquidate your company.
Can I Liquidate My Company? The answer is all Liquidations have to be undertaken by a Licensed Insolvency Practitioner or government official, known as the Official Receiver.
Can I Liquidate My Company and be the Liquidator?
No. A Liquidator needs to be independent and must not have been involved with the company that needs to be liquidated within the last 3 years in any capacity.
A Licensed Insolvency Practitioner has a duty to act in accordance with the Code of Ethics which demands the highest standards of conduct from someone who is a Liquidator and who must act in the best interests of not only the creditors but the wider public.
Can I Liquidate My Company Assets?
A Liquidation will involve a realisation of the assets and after the costs of the Liquidation have been met, then the surplus funds will be distributed to creditors. The Liquidator needs to get the best possible price for the company assets to maximise the potential realisations available.
A company’s Director cannot act as a Liquidator and it is easy to see why that is the case. The insolvency of the company that causes a Liquidation will mean that nothing must affect the safeguarding of the assets so that the losses suffered by the creditors are minimised. A Director would have a conflict of interest between their personal interests and those of the company.
Assets Sold at Undervalue
If a Director sells any of the company assets shortly prior to Liquidation then a review will need to be undertaken by the Liquidator to ensure that the sale price achieved was fair and reasonable based on market values. If a Director has undersold any of the assets, then he or she might be personally liable for any loss suffered by the company. This is important and particularly noticeable when a Director or a connected party might be the purchaser and accused of a Transaction at Undervalue.
That is why it is better to leave matters to the Liquidator to resolve so that the correct procedures are undertaken such as obtaining an independent valuation.
Investigation of the Directors’ Conduct
A Liquidator has to report on the conduct of the Director. In particular when there have been instances of misconduct and misfeasance by Directors.
There would be a huge conflict of interest with it being largely impossible for a Director to investigate their own conduct if a Director was permitted to Liquidate his or her own company. Such an investigation and relevant report where applicable is there to safeguard the public.
If you are a Director of an insolvency company or want insolvency advice, contact us for a Free Initial consultation. We have more than 20 years of experience in helping Director in insolvency cases. Contact Us to speak to our CEO, Elliot Green on 020 3925 3613.
‘Can I Liquidate My Company?’ is a page for information generally and observation. It is not legal advice and not to be relied upon as such.