Are you are a former company director or is your company is facing liquidation? Are you being accused of misfeasance (abuse of office)? The consequences are very serious.
As a company director there are many issues you must consider before your company becomes the subject of formal insolvency proceedings (voluntary or compulsory). You should never enter into insolvency proceedings unprepared or as a matter of routine.
Here are some non exhaustive questions which you need to ask yourself:
- For how long did you take goods/services from your suppliers on credit up to present?
- Have suppliers goods/services, obtained by you, that remain unpaid, been used/sold?
- Have you lent money to the company which remains outstanding?
- Have you repaid any monies to yourself owed to you by the company?
- Have you borrowed money from the company which remains unpaid?
- Have you been using the company’s property for your own personal use?
- Are there significant monies owed to HM Revenue & Customs?
- Has the company’s bank been returning items unpaid?
- Do you have outstanding personal guarantees?
- How long have you been trading insolvently?
- How many county court judgments have been recorded against your company?
- Have you given any creditor an unfair preference?
- Have you sold or transferred any assets below market value prior or during the period of insolvency?
- Have you been keeping adequate accounting records?
- Have you been a director of failed companies in the past?
There are many more questions that you need to ask yourself and ensure you have the correct explanations. This is where you will find our expertise to be of very valuable help.
Once you commit your company into insolvency proceedings the insolvency practitioner has a legal duty to file a report on the conduct of the company directors. Do not expect the insolvency practitioner to mis-inform the Secretary of State of your conduct as a director. The report or your conduct could lead to any one or more of the following:
- You are required to return property or funds to the company.
- You become the subject of directors’ disqualification proceedings.
- You are required by court order to make a significant financial contribution into the estate of the liquidated company.
- HM Revenue & Customs commence legal action against you personally for recovery of PAYE.
- Criminal action is brought against you in any allegation of fraud.
- Upon conviction your personal assets may become the subject of a confiscation order or worse; imprisonment or both.
- This is why we help you to prepare for insolvency and smooth out the entire process thereby prevent serious action from being taken against you.
We understand your position and support your entrepreneurial spirit. Occasionally, directing a business can prove difficult even for the most seasoned and well savvy directors. Let us help you through these uncertain times. Contact us now for free advice.