So here we are – you’ve decided to Liquidate your company, great, now what are the rules in the final stages before the company actually Liquidates? At this stage, more than any other you do have to be careful, you obviously know the company is Insolvent so can’t use that as a defense for wrongful trading. As a general rule, your job is now to look after the interests of the creditors, and so with everything you do, you should consider is this helping (or at least not harmful to creditors). We have listed the most common problems in these final days, and what you shouldn’t do.
- Payments to creditors
- Don’t make any payments to creditors, including HMRC. It’s that simple – this is preference and will cause you problems.
- Further Credit
- If you require goods or services before the company goes into Liquidation then you should pay for them immediately – obtaining credit at this stage will amount to fraudulent trading.
- Goods and Services already ordered
- If you have already ordered services or goods, and will not need them, then you should cancel the orders or not accept delivery of them.
- Disposal of Assets
- Do not dispose of assets prior to Liquidation unless it includes stock that would normally be sold by the business. For a pre-pack Liquidation you can sell the assets, but they need to be valued first. You don’t want to fall foul of the law by selling assets under their true value. In no circumstances should you dispose of assets to your creditors or customers who will claim a set-off (reduction in their debt).
- Company Credit Cards
- Destroy them, don’t use them – again it’s fraud.
- Maintain insurance on an company assets, and keep up the premiums. This is not a good time to crash the company van without insurance!
- Company bank account
- Any funds in the company bank account should be transferred to a ‘safe’ account (one that isn’t overdrawn and has no lending services attached). If you do not have such an account, your Liquidator will do (it’s called the client account).
- Press Statements
- No statements should be made to the press and media without prior consultation with the proposed liquidator. If appropriate an agreed press statement should be released.
- Retention of Title
- No creditor claiming retention of title to goods previously supplied by him should be permitted to remove any goods pending the appointment of a liquidator. As a compromise, the sale proceeds of the goods concerned should be paid into a separate bank account pending liquidation.
- Sending Items back to Suppliers
- No other creditor should be permitted to receive goods previously supplied by him under any circumstances.
- Despatching Items
- No goods of the company should be despatched on carriers who are owed money by the company.
- Dealing with Creditors
- If possible avoid dealing with creditors – leave it to your proposed Liquidator or your agent. Dealings with any creditor should only be continued with caution. Attempts should be made to ensure that no lien, set-off, etc could occur.
How can we help
Unlike other Liquidation Companies, we have structured ourselves and our Voluntary Liquidation Services in a way that genuinely helps you the most.
By Liquidating through us, we will:-
- Ensure you are aware of any problems before you commit to Liquidation
- Make sure your Liquidation goes as smoothly as possible
- Deal with any issues before they become a problem
- Try to make sure this is your first and only Liquidation
- Minimize the pain of Voluntary Liquidation
Make a fresh start in business and start your Liquidation – call 0800 612 94 78 now.