Directors’ Liquidation Responsibility
When a company goes into liquidation, the directors liquidation responsibility must be understood. The process can be a lengthy one but once implemented, a lot of the pressure is naturally relieved from the director or directors running the business. When business is insolvent, winding up the company shifts pressure on to the liquidators and their team including protecting assets and preventing more debt. As a Director, it is crucial that you follow the correct legal process when liquidating your company. As industry leading experts with nearly 40 years experience, we are perfectly placed to manage the process for you. We offer a free, no obligation consultation and can explain the following process in more detail.
Directors Liquidation Responsibilities:
- Once you agree the company is insolvent – in other words, it cannot meet its debts – it is the Directors liquidation responsibility to ensure you cease trading immediately. This reduces the damage to the company but also protects you as a director.
- You should not take on any more debt and you should try to secure assets which can be sold by the liquidator. If you continue to trade, knowing that your business is in trouble, you will have to face an investigation by the Insolvency Service and could be prosecuted.
- As a director, you need to call a shareholder meeting and reach an agreement about winding up the company. An insolvency practitioner will then be brought in to handle the sale of assets and manage the liquidation. Creditors may be asked to agree with the decision.
- The director also has an obligation to provide all information to the liquidator in a timely fashion, including financial records and other paperwork for the business. This is something we will be able to advise on once the process has began.
Are you a director facing liquidation? We can help. Speak to one of our experts today.