Are you a Director of a company in compulsory liquidation?

If you are a Director of an insolvent company looking to learn about Director duty in Compulsory Liquidation, Oliver Elliot can help.

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Directors whose company has entered Compulsory Liquidation have a duty to co-operate with the Official Receiver.

You must help the official receiver when the company you’re a director of is wound up (liquidated) as a result of insolvency.

Your responsibilities when your company is being liquidated

When your company is being liquidated, the court will appoint an official receiver to settle your company’s debts and investigate why your company became insolvent.

The official receiver will send you a questionnaire about your company and ask you to attend an interview.

At the interview you must:

  • give the official receiver your completed questionnaire
  • hand over all company books (accounts), records and paperwork in your possession
  • give full details of all the company’s assets and liabilities
  • tell the official receiver if somebody else is holding assets or trading records

If you do not co-operate with the official receiver, you might:

  • be prosecuted
  • be disqualified as a company director
  • have to answer questions in court
  • have a warrant issued for your arrest

If another Liquidator is appointed instead of the official receiver at a later date, who is an insolvency practitioner, then as a Director you would owe separate duties to the Liquidator.

What you can and cannot do after liquidation

After liquidation you:

  • must co-operate with the official receiver
  • cannot control the company’s business
  • cannot act for or on behalf of the company
  • cannot use company assets to pay creditors or for your own use and benefit
  • cannot re-use the company name

Settling the company’s debts and paying for shares

You may have to help the official receiver sell the company’s assets during liquidation.

If you’ve guaranteed any of the company’s debts, it means that you’ve agreed to pay the debt if the company cannot. You may also have to help pay debts if the company has traded wrongfully or fraudulently.

If you’re a shareholder of the company, you may be asked to pay for any shares that you have not paid for in full.

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Disclaimer: Director Duty In Compulsory Liquidation

This page: Director Duty In Compulsory Liquidation is not legal advice and should not be relied upon as such. This article Director Duty In Compulsory Liquidation is provided for information purposes only. You can Contact Us on the specific facts of your case to obtain relevant advice via a Free Initial Consultation.

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