In company insolvency cases, certain parties have a duty to co-operate with the Official Receiver or Liquidator once a winding up order has been made.
They must provide any information the OR or liquidator reasonably requires in the course of their work. This includes information relating to the promotion or formation of the company, as well as the business’s dealings, company affairs and details of the assets it holds. Certain parties are also legally obliged to attend meetings if asked to do so by the official receiver.
Which Parties must Co-operate with the Official Receiver?
- Past and present officers of the company. The company officers are the directors and the company secretary as stated in the articles of association.
- Those who have taken part in the formation of the company at any time up to one year before the company entered liquidation.
- Any individual who has been in employment of the company at any time during the last year.
- The officers or employees of any company who were officers of the company in question at any time during the last year.
- Any individual who has acted as an administrator, liquidator or administrative receiver of the company.
What Information do you have to Supply?
Company officers may be asked to submit a statement of affairs along with other company accounts. In most cases, an appointment will also be arranged for company officers to attend the official receiver’s office for a compulsory liquidation interview.
You will be told about any documentation you need to take along to the interview, as well as the details of the individual who is handling the liquidation. You will also be sent a questionnaire, called a PIQ(C), to complete before the interview date.
At the Interview, you will be Asked to:
- Hand over the completed questionnaire
- Supply the company’s books, records and paperwork
- Give full details of the company’s assets and liabilities
- Inform the official receiver if anybody else is holding company assets or records
You may also be Asked:
- To provide information relevant to the company, its activities or its failure
- To attend the OR’s office more than once
- Provide a sworn financial statement (the ‘statement of affairs’) and any other financial information within 21 days of being asked to do so
What Happens if you fail to Co-operate?
Failure to co-operate with the official receiver without a reasonable excuse is a criminal offence and can result in a fine. Such conduct can also be taken into account in disqualification proceedings. You can also be publicly examined by the OR or liquidator before the court and be asked questions by the company’s creditors. If you do not attend this type of examination or fail to disclose information when questioned, a warrant can be issued for your arrest.
If liquidation proceedings find you have misused company funds or traded wrongfully or fraudulently, you could also be made personally responsible for the payment of a proportion of the company’s debts. You may also be asked to make payments to honour any personal guarantees you may have signed.
Who else must Co-operate?
It is common for the official receiver to approach third parties, like accountants and solicitors, to ask for information about companies undergoing liquidation proceedings. The OR will usually make contact by telephone or in writing shortly after the winding-up order has been made.
If there are delays in the provision of the requested information, the OR can choose to apply to the court to privately examine the third party. If the court feels an examination is warranted because the information was withheld without reason, the third party can then be ordered to pay the legal costs.
Delivering up Assets and Records
The official receiver can also require a company officer or third party to pay, deliver, surrender or transfer property, records, books or papers in his or her control. Any individual asked to do so must comply with the requirement ‘without avoidable delay’.