You will need to have all relevant information, including accounts and statements ready to submit to the Official Receiver. From this point forward, the appointed liquidator will be directly responsible for all affairs of the company including all the company’s assets as laid out in Section 477 of the Corporations Act. As the company nears the final stages of liquidation, any proceeds realised from the company’s assets will be distributed to the company’s creditors. They must make a statement within 12 weeks of their appointment whether they intend to act as the company’s liquidator or appoint a separate liquidator. If you are successful in your claim, the court will issue an order to restore a company, which you must send to Companies House. Once they’ve conducted their investigation, the Official Receiver must then submit a report to the Department for Business, Energy & Industrial Strategy with recommendations about whether any sanctions need to be levied against the company’s director(s). So long story short the builder of our apartment is going into liquidation - we're pursuing an insurance claim currently so that's another story. Usually a liquidation costs between £2,500 and £5,000+VAT, however, in a lot of cases it will end up costing the director nothing! This is the only type of creditor that may claim to collect their debts once a company has entered liquidation. Generally, a director-initiated liquidation involves holding a meeting of members to vote on winding up the company and appoint a liquidator. However, the moment your company is deemed to become insolvent, you are under a legal duty to protect the interests of your creditors. Voluntary administration An independent registered liquidator (the voluntary administrator) takes full control of the company to try to work out a way to save the company or the company’s business. However, you must be aware of breaching the Insolvency Act 1986 with transactions at … Additionally, the director must have a verifiable explanation for every financial move the company has made up to and including the point of liquidation. Your company will need to have some money or assets that can be sold to pay the IP's fees. If the claim for losses is high enough, the director may have to file for personal bankruptcy. Unfortunately, even if no insolvent trading has occurred, if a director has not kept financial books and records for the 7 year period required, they will have no defence if they are hit with a claim of insolvent trading. Whether it is the creditor, director or company themselves looking to dissolve the company, they should explore other options before proceeding with the winding-up petition for a Compulsory Liquidation. So, in this guide, we'll dispel some of those myths and tell you what really happens to a director when their limited company goes through liquidation. Director disputes – You could choose to enter provisional liquidation if the company directors are in a dispute, or if the company is insolvent and … After a company goes into liquidation, unsecured creditors cannot commence or continue legal action against the company, unless the court permits. Contact the Insolvency Experts today to ensure the protection of your personal assets. The director will be responsible for paying the fees associated with the liquidation, but in many cases, this can be taken from the company’s assets. If a company is in Firstly, it's key to note that no - liquidation does not mean you're banned from becoming a director of another company. AABRS Limited is a company registered in England & Wales under company number 07644635, located at Langley House, Park Road, London N2 8EY, Authorised and regulated by the Financial Conduct Authority Privacy Policy , Cookie Policy , Legal, Friendly, confidential advice is a click away, Here at AABRS we specialise in helping company directors facing the the threat of insolvency. Consequently, resigning as a director immediately before insolvency will not absolve you from your responsibilities as a director. If the company is unable to repay this loan, the creditor has a direct claim on the guarantor and potentially their personal assets. What both processes have in common is that they ultimately result in the complete closure of the business and the dismissal of any staff employed by the company. While in most cases the director is not financially liable for these debts, there is the potential for personal assets to be seized. All of these outcomes are possible for all types of company liquidation including creditors voluntary liquidation, voluntary administration and corporate insolvencies. Fraudulent Trading It is better to initiate the company liquidation process in South Africa voluntarily, as opposed to being forced by court order on demand of a creditor. As the director you have a duty to act in the best interests of your company, its creditors and its shareholders. Having a winding up order issued against your company is very serious, and should be avoided wherever possible. (1) Directors Powers Cease once the Insolvency Practitioner has been Appointed. Resigning as a director of a company Directors resign all the time, for various reasons be it retirement, desiring a new venture or relocation, but to name a few. Insolvent trading is illegal and can occur both intentionally and unintentionally.