So act now and get help for your company and more importantly start reducing your own risks.
The action described above can be regarded as wrongful trading; if a liquidator can prove there was wrongful trading then, you are at much increased personal risk. A classic example of wrongful trading is taking credit from a supplier or taking deposits from customers when you know that it is unlikely that you can pay them back.
Voluntary liquidation When a solvent company decides to go into liquidation, it enters what is called a members’ voluntary liquidation, where the majority of the directors declare that the company is, indeed, solvent.
Once this is agreed upon, the primary role of the liquidator is to recoup the maximum amount possible for the company’s shareholders (paying creditors should be a non-issue because of its solvency).
This nonsense just highlights that people make things up all the time about subjects they have little knowledge of.
Having a limited liability company means that the directors have little risk (or limited liability) if the company fails, as long as they have acted properly and acted in time.
Did you know that the directors can be made personally liable for the debts of the company from the onset of insolvency?
Additionally, the directors may face disqualification proceedings under the Company Directors Disqualification Act 1986 for up to 15 years, they can be fined and may face the loss of personal assets like your home, or even personal bankruptcy.
In a little while the stress will go and you can focus on other things that are more important. Get our new free Experts Complete Guide to Creditors Voluntary Liquidation We are experts in liquidation, voluntary liquidation, administration, pre-pack administration, business rescue, corporate rescue and company rescue, we can help solve your problems but only if you talk to us.
The Citizens Information website defines liquidation as “the process of winding up a company so that it no longer exists by using its assets to pay its debts.” The liquidation options available to a company depend on whether it’s solvent (can pay its debts) or insolvent (cannot) and whether it enters it voluntarily or not.
This risk RISES the longer you don't act to put the company into liquidation.
If you fail to act and if eventually the company is wound up by the creditors (compulsory liquidation) then the Official Receiver (OR) will be appointed to liquidate the business and he or she will investigate the activity of the directors and the business over the last 2-3 years.