Frequently Asked Questions

Largely no – directors are not responsible for company debt.

The liabilities that a company incurs usually relates to such things are trade and expense debts, HMRC liabilities, loans and hire or lease agreements. One of the benefits of operating a limited company is that protection is given to the directors by way of limited liability.  In Simple terms the liabilities of the limited company do not fall on the directors personally.  There are some exceptions and these are explored below however the general liabilities that are incurred are not subject to personal liability of the directors.

Should the company be placed into creditors voluntary liquidation, the debts of the company essentially die with the liquidation and as such are handled by Liquidate my Business when their Insolvency Practitioners, Philippa Smith and Jessica Thomas are appointed.

When discussing the details of the company, Liquidate my Business will discuss the below to ensure that there are no financial implications that would fall on the directors

These include:

• Overdrawn director’s loan accounts
• Signing a personal guarantee in respect of company debts
• Debts have accumulated due to fraudulent means (such as taking on credit you knew you wouldn’t be able to repay)
• Director misconduct
• dividends paid whilst the company is insolvent
• use of company funds for other means

Disposing of the company's assets at undervalue or no value

Here at Liquidate my Business, we appreciate that finding the costs to place the company into liquidation where there are no assets available in the company can be tricky.  We have a quick and easy ‘get a quote’ facility on our website which will provide you with an instant quote.

The process of creditors voluntary liquidation, and other insolvency processes are met in the first instance from assets of the company if these are available.  Should there be no assets available to cover the costs, then the directors will be required to cover these costs personally.

Liquidate my Business are able to offer assistance with means of payment.

Insolvency is a term used to describe the state of the company when the liabilities can not be met. There are 2 tests of insolvency and are covered under S123 of the Insolvency Act 1986. The cash flow test is defined by a company that can not meet its debts as and when they fall due, alternatively a company can be deemed insolvent on a balance sheet basis if its assets are insufficient to meet its liabilities.

If you find that any of the below sound familiar to your company then it is likely that one or both of the above criteria are met and your company is insolvent

• Creditors have issued demand for payment after invoices are not being paid on time. This could include legal documentation being received and even county court judgements or statutory demands for payment

• Payment to HMRC are being made late, if at all
• The assets that the company holds i.e cash, debtors, fixed assets are insufficient to pay the liabilities due or becoming due
• There are insufficient funds to enable employees to be paid wages
• The company is struggling to finance general day to day trade
• The Company finance facilities, e.g overdraft facilities are up to the limit and no further funding is available

As a director, you have fiduciary duties which include ceasing to trade should you become aware that the company is insolvent.  If you are experiencing any of the above within your company, contact Liquidate my Business today for a confidential meeting to discuss your options further.

Contact Liquidate my Business today for a confidential meeting to discuss your options further.

Contact Liquidate my Business today if you have received either a CCJ or winding up petition to discuss further.

When a Winding Up Petition is issued against a Company, it is the commencement of the process known as compulsory liquidation. 

If your company receives a winding up petition, in order to avoid the compulsory liquidation if possible you should contact Liquidate my Business immediately as your options are significantly reducing the longer the matter is left unresolved.

If your company is receiving creditor pressure, such things as court action and CCJ’s then if ignored can lead to the issuing of a winding up petition.   

Compulsory Liquidation is a court driven process initiated by an unsatisfied debt of £750 or more.  If a Petition is issued against a company, an advertisement is placed in the London Gazette leading to such things as the business bank account being frozen.  Should this occur it is almost impossible for a company to continue to trade and should the winding up order be made then the Official Receiver is appointed as the Liquidator.  The directors have no control over the process and of all the Insolvency Procedures, compulsory liquidation is commonly knows as the least favourable for many reasons.

It is possible to avoid compulsory liquidation depending on the specific details of the case, however it is imperative to act quickly. 

If you are struggling to meet the liabilities due to HMRC then the chances are your company is insolvent.  Whilst there are options for time to pay arrangements with HMRC these are case by case dependant and are not automatically available.

HMRC will take non payment of VAT as a serious matter, of all the taxes VAT is most likely to be the most aggressively chased as ultimately this money was never actually meant to be utilised for the running of the business you are simply acting as a collector and an intermediary holder of the funds whilst payment is made to HMRC.

There are options available for company’s that are experiencing VAT arrears, PAYE arrears of Corporation Tax arrears.  Should the company enter into liquidation then these debts will be handling with the liquidation and will ultimately die with the liquidation.

For further information contact Liquidate my Business experienced staff who will be pleased to help.

In the first instance, any complaints should be made to Philippa Smith or Jessica Thomas at the above company contact details.

If however you do not feel that the complaint has been satisfactorily resolved, then you can contact the Insolvency Service as follows:

Complaints to the single Complaints Gateway may be made either by:

calling the Insolvency Service Enquiry Line on 0300 678 0015 (Monday to Friday 9am to 5pm), or completing and emailing the online complaints form on the Insolvency Service website https://www.gov.uk/complain-about-insolvency-practitioner https://www.gov.uk/complain-about-insolvency-practitioner