The simple answer to this is yes! The placing of a company into liquidation does not in any way, shape or form prevent an individual from being the director of another company either immediately after the liquidation or in the future. Where the confusion can sometimes lie is in understanding what the duties of a liquidator are following his appointment in relation to the investigation.
What happens after liquidation?
In every Creditors Voluntary Liquidation the liquidator has a number of statutory areas of investigation following his appointment. A majority of these are undertaken to enable him to form a picture as to the reasons for the failure for the company and more specifically whether it was caused by the way the company was run by the directors. Depending upon his findings this can have an effect on the ability of an individual to act as a director going forward. The obvious things a liquidator will look at is amounts of remuneration withdrawn by a director during the “lean” times or whether the director was aware or should have concluded that the company was insolvent and if so did he act accordingly. This investigation culminates in the liquidator submitting an online report to Business Innovation and Skills (BIS) which is a government department that reviews every report submitted by liquidators in England and Wales. This report must submitted within three months of the liquidator’s appointment and depending upon the contents the relevant officer at BIS will decide whether or not it requires further consideration. In areas where the conduct of the director is deemed to have directly led to the failure of the company then BIS has the power to consider a directors disqualification order for between 2 and 15 years. It should be noted that this course of action is rarely based upon the number of insolvencies but directors must be mindful to take advice when the company is experiencing financial difficulties as soon as possible to protect themselves from potential disqualification.
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If you have any questions or concerns regarding liquidation, then please get in touch with our specialists today. Contact The Insolvency Experts online or call us directly on 0300 303 8284 to receive expert business debt advice and support.