If you are a Director of an insolvent company looking to learn about Director duty in Compulsory Liquidation, Oliver Elliot can help.
Directors whose company has entered Compulsory Liquidation have a duty to co-operate with the Official Receiver.
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
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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