Posted on: Thursday 9th January, 2020
You may be accused of trading illegally if you carry on trading when your company is insolvent, and in doing so, worsen the position of creditors. Although it’s incumbent on directors to stop trading under these circumstances, in reality this can be a complex scenario.
You may believe, for example, that by trading on, you’re doing your best for creditors and acting with the best intentions. Depending on the circumstances, however, the Official Receiver may deem your actions illegal if the company is later liquidated.
Deliberately attempting to defraud your creditors is regarded as illegal trading. This could include:
If you believe your company is approaching insolvency, it’s crucial to seek assistance from a licensed insolvency practitioner (IP). They will be able to guide you on your best options, bearing in mind the needs of creditors, and protect you from future allegations of illegal trading.
Essentially, you need to:
Illegal trading is a criminal offence that carries with it a possible prison sentence and/or potential personal liability for business debts. Our experts at CFS Redundancy Payments can offer the reliable advice you need if you’re worried about trading illegally - call one of the team for a same-day meeting. CFS are Authorised and Regulated by the Financial Conduct Authority. Authorisation No 830857. You can check our registration here.
Does accepting a new job offer before the date of redundancy prevent a director making a claim for redundancy to the RPS
If you are looking to close your limited company, you may have attempted to strike it off by submitting a DS01 form to Companies House. This process is also sometimes referred to as dissolving or company dissolution.
A Creditors’ Voluntary Liquidation (CVL) is an official procedure whereby a company’s assets are liquidated in order to pay creditors. It’s typically initiated by directors when their company becomes insolvent and there is no hope of business recovery.
CFS Redundancy Payments are a very professional company, Caroline who is dealing with our case is friendly, compassionate and very clear in explaining everything during this difficult time. The service we have received has been amazing, Thank you.Tina Hill Director of a professional services firm