OFFICIAL RECEIVER ROLE: The official receiver takes over the control of all property if you become bankrupt.
The director of a company has a legal duty to co-operate with the official receiver. Among those duties is producing information about the business finances to the ‘OR’.
This page explains what to expect when dealing with the official receiver after business debt and bankruptcy.
They will contact you within a few days of a bankruptcy order. Apart from helping them in their role, you may also need to settle certain debts.
In most cases, liquidation occurs because of business insolvency. The court appoints an official receiver when a company is being wound up. After company liquidation there are some limits on what you can do – and what you definitely cannot do.
The main role is to settle company debt and investigate why it became insolvent. This is one reason why the director has responsibilities in a liquidated business. They must help and co-operate with the official receiver.
As part of the investigation they will send out a questionnaire about the company. They will also ask the director to attend an interview within 10 days of a bankruptcy order. As a rule, the interview will take a few hours to complete and you must:
- Hand over the completed questionnaire and all company accounts to the official receiver.
- Provide full details of all the company assets and its liabilities.
- Inform the official receiver if anyone else holds business assets or trading records.
In most cases the official receiver also acts as the bankruptcy trustee. Either way, failing to co-operate with the official receiver or bankruptcy means:
- You can get prosecuted and disqualified as a company director.
- You may need to answer questions in court and have a warrant issued for your arrest.
What You Cannot Do after Company Liquidation
Cooperating with the official receiver after company liquidation is a ‘must do‘ situation. But, the things you cannot do afterwards include:
- Taking control of the company business.
- Using company assets to pay off creditors (or for your own use and benefit).
- Acting for, or on behalf of, the company.
- Reusing the company name (some exceptions apply).
Settling Company Debts and Paying for Shares
As a rule, you will need to help the official receiver sell company assets during liquidation. You may also have ‘guaranteed’ to pay off some of the company debts if the business was unable to do so.
There are other situations where you might need to help pay debts. Examples includes ‘wrongful’ or ‘fraudulent’ trading by the company. Shareholders may also need to pay for any shares that they did not already pay for in full.