Official Receiver Examinations
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How to prepare for the intreview
We provide directors and individuals with guidance and advice on how to avoid adverse proceedings.
CALL 020 7504 1300 NOW
Support for directors and individuals
Call 0207 504 1300 now for assistance with your Official Receiver Examination
When a company becomes the subject of a Compulsory Winding up Order, the court makes a ruling to effectively end the company's existence.
The order is sent to the government's Insolvency Service. There, it will be:
- Forwarded to a civil servant officer of the court, the Official Receiver
The office of the Official Receiver deals with all new bankruptcy and company winding up orders for the court.
The Official Receiver includes your information in their statement of affairs, which they use to explain to creditors why the company has been wound up.
The Official Receiver randomly selects a local insolvency practitioner (IP) to liquidate the company on behalf of the Secretary of State for Business, Energy and Industrial Strategy, if:
- The company has physical assets
- There are investigations to conduct.
Official Receiver Examination
An examiner from the Official Receiver’s office may summon anyone who had a relationship with the company in the 3 years leading up to its demise.
Usually, the Insolvency Service summon the company director for an interview to discuss their business affairs and conduct. However, the Official Receiver may request interviews with as many people connected to the company as necessary. You will complete a questionnaire detailing the company's:
- Financial affairs
- Business activities.
You should either bring the completed questionnaire to the interview or post it back to the Official Receiver beforehand.
How to Prepare
The best approach for the Official Receiver Examination is to:
- Be open and honest
- Explain the steps you took to protect the interests of the company's creditors, shareholders and employees, and Her Majesty’s Revenue and Customs (HMRC).
Few directors arrive to the examination prepared. However, I&L can mitigate any discomfort by:
- Guiding you through the process
- Preparing you for the interview
- Helping to explain your actions.
The Official Receiver and Examiner act solely in the interest of the company's creditors. They cannot provide advice that's in your best interest. I&L will counsel you on the issues that require attention to limit any adverse consequences against you such as personal liability claims, Director Disqualification Proceedings, or worse.
Allegations of Misconduct
The Examiner looks for evidence of misconduct (also known as Misfeasance) by the director. They try to determine whether the director misplaced or abused creditors' trust. Examiners ask lots of questions, and seek to identify areas where the director may have committed acts of misfeasance. But if they believe mistakes were entrepreneurial rather than malicious, the director will not be severely reprimanded.
In the months leading up to and during insolvency, the company would've collected VAT, National Insurance, and PAY taxes. Did HMRC receive any of this money? If not, what happened to the exchequer's revenue? A competent IP should ascertain how unpaid HMRC revenue was used to:
- Repay the director's loan account
- Compensate friends and suppliers the director was planning to bring over to a new business.
Either way, both examples would reveal evidence of preferential treatment to creditors at the expense of HMRC.
Directors' Conduct D-Report
Depending on the type of liquidation, either the liquidator or Official Receiver will file to the Insolvency Service a Directors' Conduct D-Report. This is a confidential document outlining the director's behaviour. To prevent liquidators and Official Receivers straying from the truth, the D-Report is prescriptive, and asks questions like:
- How many creditors?
- When did creditors last receive payment?
- How much is due to HMRC?
- When was the last tax payment?
- What date were your most recent orders made?
- When were most recent invoices raised?
- In the months prior to insolvency how many purchases were made?
The D-Report is submitted to the Secretary of State for Business, Energy and Industrial Strategy. Director Disqualification Proceedings may follow if its content raises any serious questions about the director's conduct, especially if they owe significant HMRC debts.
Lost Accounts, Books and Records
It's surprising how many directors turn up for interviews claiming to have 'lost' the company's accounts, books, and records. This is pretty senseless because according to Section 386 of the Companies Act 2006; a director must maintain company accounting records for up to 6 years, and failure to deliver them upon request is an offense.
Creditors' Voluntary Liquidations
In a Creditors' Voluntary Liquidation (CVL), the liquidator examines the director as the Official Receiver would. The Examination is less formal e.g. interviews are sometimes conducted via telephone. Liquidators are nominated by directors in CVLs. However, liquidators in Compulsory Liquidations are appointed by the Official Receiver, and therefore have no loyalty to the director(s).
Dealing with Liquidators
A liquidator’s role is often contradictory because they're supposed to protect creditors in Compulsory Liquidations, but creditors frequently complain about excessive liquidator fees. Equally conflicting is the notion that a liquidator in CVL serves and protects creditors because they must cosy up to the company's director(s) to get the job.
Official Receiver Examinations are very serious and you will need expert assistance and support. I&L can prepare, guide and advise directors how to protect themselves against adverse proceedings. Call 020 7504 1300 now for free and confidential advice…