Company with Receiver - only Director wishes to Resign - any benefits or consequences?

Company with Receiver - only Director wishes to...

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A property Company 'went under' a while back.  It could not pay its bills.  It became insolvent because the Bank withdrew funding.

The Company is currently with the Receiver.  There is only 1 Director and he wishes to Resign.  This would mean the Company has no real person as Director -  I realise according to the Companies Act 2006 there should be a human director.  But the Company is with the Receiver.... 

This Director has many Companies and he obviously doesn't want to be disqualified from being a Director.  He has said the Receiver would appoint a new Director or Companies House/HMRC would just close the Company with no bad consequence to him. 

Is this correct?  What would any consequence or benefit be? I would appreciate any help! 

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paddle steamer
By DJKL
10th Jul 2015 16:43

He needs to take professional advice

Not my area at all, two half days in my career filling in insolvent company returns being the sum of my experience. However I think it is important he/you are clear what "type" of receiver is in place. In addition not sure resigning now makes a difference, if it carries later into liquidation is there not a report of past directors anyway- maybe  being helpful to the Receiver is a better idea. 

I think directors present/past have a duty to co-operate  with certain receivers, see below.

"Application to court by an administrative receiver

An administrative receiver may apply to the court for any person to be ordered to deliver up property, books, papers or records, to which the company appears entitled, to him/her [Note 39]. The directors, ex-directors, employees and ex-employees have a duty to co-operate with the administrative receiver [Note 40]. If directors, former directors, employees, past or present or any other person with property or information regarding the company fails to co-operate with the administrative receiver an application can be made to the court for a private examination and/or production of documents [Note 41]."

https://www.insolvencydirect.bis.gov.uk/technicalmanual/Ch49-60/Chapter%...

If he were my client I would get him to take professional advice re his options and how his actions may later be viewed.

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By zebaa
10th Jul 2015 18:08

He can resign at any time. The penalty for a company not having any directors is that companies house will write giving three months notice, after which if there are still no directors the company will be struck off. HMRC or someone else may object to the striking off and so companies house will try again in three to six months time. In effect, a directors resignation may push things on a bit quicker. Given that is what he wants to do, I can see no reason on the information supplied, for remaining a director.

A past director will have to provide information in the case of a liquidation. Any debts are the companies, not the directors, unless the company has traded whilst insolvent, so there should be no bad consequences.

 

 

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By barrywhite
13th Jul 2015 09:57

Thanks,

 

I think given that there is no real benefit and some possible negative consequences that it is a bad idea.

many thanks

Big Barry

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