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How much do liquidators charge and how do I pay?
Liquidators charges are dependent upon the size and complexity of the case. At Maidment Judd we would normally charge a fixed fee, which includes all of the work required to place the company into liquidation. Following the appointment of a liquidator, the fees must be agreed with creditors but are normally based on an hourly rate and paid from asset realisations.
Liquidators have a duty to disclose fully how much their charges are for handling a particular case and at Maidment Judd we provide a very detailed breakdown split by member of staff and work undertaken. As an example of our normal charges, we would charge in the region of £4,000 plus VAT to place a company into liquidation.
As a director, what are my responsibilities?
As a director of a limited company, you have a responsibility to act in the best interests of the company and it’s creditors. This is particularly important where the company has become insolvent i.e. cannot afford to repay all of it’s debts.
There are also provisions in the Insolvency & Companies Act for making directors personally liable for company’s debts, where they have continued to trade beyond a point in time when they should not have done so. If you are concerned as to any aspect of your responsibilities, early advice should be sought and we are happy to provide an initial consultation with directors which is free of charge.
Will I be disqualified as a company director?
The Department of Trade & Industry has a duty to investigate the conduct of all directors of a company that has gone into insolvent liquidation. This includes any directors who have resigned in the period three years prior to liquidation and also includes shadow directors.
There are a number of factors which the DTI take into account when determining unfitness. These are spelled out in the Company Directors Disqualification Act 1986 and include matters such as whether accounts have been filed on time, whether books and records have been kept up to date and whether the director has benefited personally from the liquidation of the company.
I am a director of a company and have no assets and no money – what options do I have?
Directors of companies have no personal responsibility to pay to place the company into liquidation. If a company therefore has no assets and no money, it is possible to apply to the Registrar of Companies under Section 652 of the Companies Act 1986 to have the company struck off.
The other alternative is to ask a creditor of the company to take action and wind the company up themselves. If they do this the cost will be born by the creditor.
How long will the liquidation take?
The average length of a liquidation is nine to twelve months, from the appointment of a liquidator. However, dependent upon the complexity of the case, the liquidation can take a substantially longer period to be concluded.
There is no time scale to complete a liquidation. In order to place a company into liquidation, there are various procedures that must be adhered to and each case is therefore different. However to place a company into creditors voluntary liquidation, from the point of initial contact until a meeting of creditors is held, will be in the region of three to four weeks.
Can I start up as a director of a new company?
There are no restrictions on a director becoming or remaining a director of another company. This is until and unless a disqualification order is made following action taken by the DTI. There are however restrictions on re-using the name of a company that has gone into insolvent liquidation.
Further advice must be sought if this is being considered, as it is a
criminal and civil offence to start a new company after the failure
of the old and re-use the same, or similar, name.
Can I purchase the assets of liquidated company?
A liquidator must ensure that the best price is obtained for the assets of a company. Directors and other connected parties are not precluded from making offers for these assets, but proper market value must be obtained for them.
At Maidment Judd we always use professional valuation agents in order to ascertain the correct value of assets and will then endeavour to dispose of them for the best value possible.
What rights as a creditor do I have ?
There is a basic right as a creditor to receive reasonable information from a liquidator as to how the liquidation process is being conducted. A liquidator also has a duty to report to creditors once a year with a summary of receipts and payments in the liquidation to date.
Creditors have the right to form a committee of creditors to oversee the conduct of a liquidator and ultimately if creditors are unhappy with any decision taken by a liquidator, they have the right to reply to the court to have the decision reviewed.
As a creditor, when will I get paid?
There is no set guideline for when dividends to creditors must be paid. However, the law is quite clear in that as soon as practicable, distributions to all creditors must be made. This can sometimes be a considerable time due to having to collate the claims of all creditors and ensuring that all matters have, or are, being dealt with.
If you are concerned that a liquidation is taking longer than necessary, then you should ask for details as to why.
As an employee, will I get paid?
Employers on the one hand are the same as creditors with respect to the receipt of information and lodging a claim in the winding-up. However the government under the Employment Protection Act Regulations will allow employees to claim unpaid wages, holiday pay, pay in lieu of notice and redundancy pay from the National Insurance Fund and in such a way, employees will receive their money quicker than other creditors would.
These payments are subject to certain restrictions of time and money for example, the maximum at present of £320 per week will now be paid to any employees under each of the four sections. Any amount unpaid by the National Insurance Fund will rank as a creditor of the company and be paid alongside other creditors.