If you have given any Personal Guarantees to creditors then you will be liable to the extent that they are not paid through the Liquidation. Apart from that, providing you have acted in good faith, the default position is that you will not be liable.
However, if you carry on trading and making creditors’ position worse beyond the point when a reasonable person would have stopped trading, you can be held liable for wrongful trading or trading whilst insolvent.
Wherever possible the Liquidator is paid from the Company’s assets. This may be via you buying them at a fair value, or through a sale to the highest bidding third party. Where there are no assets and the Director decides to fund the process personally we at S P Ford & Co are happy to discuss the situation with you to reach a sensible fixed price.
Creditors’ Voluntary Liquidation is a Director led process. You choose a Licensed Insolvency Practitioner that you are comfortable working with and work together to place your Company into Liquidation and potentially to allow you to legally take the business forward in some form. There is no Court involvement and the process typically takes around 1 month.
A Compulsory Liquidation follows the issuing of a Winding Up petition, typically from a creditor, more often than not HMRC. There is a Court Hearing at which the Winding Up Order is granted and the Official Receiver, a representative of the Government, conducts the investigations into the Directors’ conduct.
The default position is yes, definitely. Providing you have acted in good faith it is extremely unlikely that you will be disqualified from acting as a Director in the future.
Yes. In fact the legislation is very supportive of Directors who wish to restart their businesses with a clean slate. Assets can be purchased from the Liquidator for a fair value, giving Directors the option to set up a new business without the burden of debt that their current Company is carrying.
No. Companies House will usually suspend the dissolution process in order to give the Company time to deal with its affairs more appropriately. It is imperative that you contact a Licensed Insolvency Practitioner as soon as possible if you are threatened with dissolution so as to take back control of the situation and avoid it being dissolved. You can then work with Steve Ford of S P Ford & Co. to help you deal with the issue and, if necessary, to be appointed as Liquidator.