Understanding Antecedent Transactions
Antecedent Transactions: A complete guide for company directors Before a company goes through formal insolvency processes like liquidation, there are specific transactions called antecedent transactions. These transactions can be undone by a liquidator or administrator if the company was insolvent when they happened or if they led to insolvency later on. The person in charge […]
Are directors liable for limited company HMRC tax debts?
Understanding company tax liability in insolvency In the UK, a limited company is seen as a distinct entity, legally separate from its directors and shareholders. Basically, this means the company’s funds are owned by the company, not its directors or shareholders. Similarly, any debts the business incurs are the company’s responsibility to settle, not that […]
What are voidable transactions in an insolvency process?
Which transactions could be challenged and overturned in insolvency? Voidable transactions, also referred to as antecedent transactions, are deals occurring before insolvency, which might be annulled. These transactions can pose significant issues for directors of insolvent firms. If you engage in a voidable transaction and your company is later liquidated, you may be personally responsible […]
Who can petition to wind up my company?
Find out which stakeholders can petition your company to try and close it down A Winding Up Petition is a potent legal measure creditors can use to force your business into closure. Without valid grounds to contest it, the court may issue an order for Compulsory Liquidation, resulting in the shutdown of your business. Although […]
What are the risks of trading while insolvent?
How can you protect yourself from the risks of trading while insolvent? If your business can’t meet its debts on time or lacks ample assets for its obligations, it’s likely insolvent. As a company director, your legal duty is to act in the creditors’ best interests. If your business has little chance of recovery or […]
What is wrongful trading in company insolvency?
What is wrongful business trading? Wrongful trading happens when a director keeps trading even after knowing the company is broke and unlikely to bounce back financially. Section 214 of the Insolvency Act 1986 deals with wrongful trading and can make directors personally responsible for the company’s debts if found guilty. What do we mean […]
Understanding Company Voluntary Arrangements (CVAs)
What is the process for a Company Voluntary Arrangement (CVA)? A Company Voluntary Arrangement, known as a CVA, is a proper way for a financially troubled company to sort out its debts. It’s like a payment plan that the company and its creditors agree on, and it’s legally binding. CVAs usually go on for 3-5 […]
SEIS/EIS loss relief in insolvency and liquidation
What is SEIS/EIS loss relief and when can I make a claim? The Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) offer tax relief for investing in eligible early-stage and growing companies. Investing in private firms comes with risks, so these tax reliefs aim to boost financial rewards and promote investment. The main […]
Limited Company Fraudulent Trading Explained
What is Fraudulent Trading? Fraudulent trading occurs when a company conducts business with the aim of intentionally misleading and defrauding its creditors. This is a criminal offence, and being proven guilty of such actions can result in significant consequences at both a personal and business level. Consequences encompass personal responsibility for company debts, disqualification from […]
How to liquidate a company?
Find out how you can close down a solvent or insolvent company Closing down a limited company formally involves liquidation. There are three methods: two initiated voluntarily by company directors, and one arising from creditor action (Compulsory Liquidation). This article explains the company liquidation process, details each method, and outlines the director’s role. Exploring […]