Effect of winding up on directors

Directors disqualified and held liable for company debt

Once a winding up order is granted, the liquidator will carry out an investigation of the conduct of the directors to make sure that they have acted properly while managing the company.

A review may also be carried out by the liquidator on the actions of anyone who acted as a director of the company during the last three years or anyone who was not formally registered as a director but who seems to have acted in that capacity.

The result of the report could lead to a director being disqualified and or made liable for the company's debts

If your company is trading insolvently, you could be held responsible for its debts. Call us now to discuss your options Call 0800 8 40 40 42

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Wrongful trading

The purpose of the liquidator's investigation of the company's directors is to make sure that they have acted properly in their running of the company.

The liquidator will submit a report about the directors to the insolvency service. This report is called the Directors Disqualification report and is also known as the D1 report.

If any director allowed the company to continue trading while knowing that it was insolvent particularly if this lead to the creditor's position being made worse, then they could be accused of wrongful trading.

The consequences of being accused of wrongful trading can be very serious for a director.

As a result of wrongful trading, a director can be disqualified from being a director and would have to stand down from any other directorships that they hold. In addition, they could be held personally responsible for any debts that were incurred by the company from the time that they knew it was trading insolvently.

If your company is trading insolvently, you could be held responsible for its debts. Call us now to discuss your options

Call 0800 8 40 40 42