Insolvency

There are many reasons to restore a company to the register, for example:

1. To enable a claim to be brought against it.
2. To deal with any property / cash still in the company.
3. Where the business was continuing to trade and was dissolved in error.

This can be done by way of administrative restoration, or by way of Court Order, depending upon the circumstances, provided the company dissolved within 6 years.

We can provide advice and guidance to seek the company’s restoration.

When a liquidator is appointed, they have a number of functions:

1)  Collect in the Company’s assets – which includes all documents, accounts and books the director may have kept;

2) Sell any assets that may have value; and

3) Distribute the proceeds to the Company’s creditors.

When a liquidator is appointed, the liquidator effectively takes over the directors’ powers and becomes the authority that causes the Company to act. Their job is to then act in the best interests of the Company and thereby the creditors of the Company as a whole – not the director.

This includes investigating the directors of the Company to establish whether or not there has been wrongdoing to further the losses to the creditors.

Where a breach of duty is found, or indeed transactions wrongly entered established, the director can be at risk of personal liability.

However, where any company has been run with appropriate records and in accordance with the director’s duties, the liquidation shall go smoothly.

We can collaborate with other professionals to provide such advice.

It is crucial that you obtain legal advice urgently, as there are often short deadlines and swift advice to be given.

Such proceedings may be defended (for example, if the debt being pursued is substantially disputed), but ignoring such proceedings can result in a bankruptcy petition, bankruptcy order or winding up petition being made in your absence, which can have severe consequences.

Take action today and contact our team for immediate, expert guidance to protect your position and safeguard your future.

Director personal guarantees are legally binding agreements made by directors of a company. The nature of these agreements is that, should the company face financial issues, the director would then take individual responsibility for any outstanding obligations.

Invaliding or setting aside personal guarantees can be difficult and complex, and Jacksons may assist in providing advice as to the enforceability of any guarantees.

Should the creditors seek to enforce those personal guarantees, we can provide advice as to options, as well as explore potential negotiations.

The Company Directors Disqualification Act 1986 (“CDDA”) aims to maintain the integrity of the business environment. Those who become directors of limited companies should carry out their duties honestly and responsibly, make sure they or the company complies with the law and all relevant regulations and exercise adequate skill and care with proper regard to the interests of the company’s creditors, customers, shareholders, employees and, in some circumstances, the general public.

Should breaches of any of the above be flagged to the Insolvency Service, it may bring proceedings on behalf of the Secretary of State, by way of disqualification or for a contribution to losses.

Director disqualification is the process whereby a person is disqualified from becoming a director of a company or indeed acting as one, including the promotion, formation or management of a company. This can last a period from 2 to 15 years and will be public.

It is important to cooperate with any queries and obtain advice should you have any queries on the process or indeed mitigating your position or defending the proceedings. We’re here to guide you, reach out today for tailored advice on mitigating or defending proceedings.

There are many potential claims that may be taken by a liquidator or trustee in bankruptcy to hold directors accountable, or penalise individuals, where steps are taken to place assets out of the reach of creditors.

Consequences might include:

1. Transactions being set aside completely;
2. Directors being held personally liable to the value of the asset transferred;
3. Disqualification as a director;
4. Bankruptcy Restrictions Orders in the event of an individual; and
5. Significant costs orders.

We strongly advised that detailed advice be sought prior to any transaction taken place, whether before or after winding up or bankruptcy petitions.

The Companies Act 2006 (“the Companies Act”) places upon individuals a number of duties

when acting as a director of a company. These include:

1. Duty to promote the success of the Company
2. Duty to exercise reasonable care, skill, and diligence
3. Duty to avoid a conflict of interest

Generally, duties are owed to the Company and to its shareholders.

However, where the Company is bordering on insolvency or where it can be said that liquidation or administration is probable, the directors are required to have proper regard to the interests of the creditors, as well as those of the shareholders.

We can advise you as to your personal duties, regardless of the stage of the company’s life.

As will always be the case, the director’s conduct during the company’s lifespan will be interrogated upon the appointment of an insolvency practitioner.

This can, from time to time, result in those directors being pursued for losses incurred by the company.

The first step would be to come and see us in order that we may provide advice as to the merits of any claim. We would provide a view on any defences that may be available to you and/or prospects of settlement, which we can negotiate on your behalf.

As firm grounded in collaboration, we work with a number of professionals, to ensure the highest level of care to our clients.

We have invested in building strong networks to ensure each client receives advice from trusted professionals, with the confidence that we can work together to provide the best care.