An article in Accountancy Age, based on information obtained from the London Gazette, reports that Administrations are at their lowest since the fourth quarter of 2007.

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In the case of Re Mumtaz Properties Ltd; Wetton v Ahmed, the Court of Appeal confirmed that a person who acts as a director, but who is not formally appointed as such (a de facto director), can be jointly and severally liable to repay directors' loans.

An article in Accountancy Age confirms that HM Revenue and Customs is owed almost £1bn under the ‘Time to Pay’ scheme.

An article in Accountancy Age states that the proposed Insolvency reforms, including the setting up of a complaints body dealing will IPs fees, will cost business.

In the first quarter of 2011 there were 12,539 bankruptcies, a fall of 31.3% on the same quarter a year ago, the Insolvency Service report shows.

According to an article in Accountancy Age, there has been a huge increase in the number of ‘Time to Pay’ arrangements that have been rejected by HMRC.

An article published on the BBC's website reports that an increasing number of UK firms are showing signs of financial distress.

The full article can be found at:

http://www.bbc.co.uk/news/business-13054587

The Daily Telegraph reports that the middle-classes are seeing the biggest rise in insolvencies because of unemployment and divorce.

Striking off a company where the assets are negligible and the liabilities are at a level where creditors are unlikely to petition for the winding up of the company is often seen as a simple and low cost option for directors.

However, consideration should be given as to whether the directors and shareholders would be entitled to redundancy, wages, holiday pay and pay in lieu of notice from the company as these claims can be substantial.

In the event of formal insolvency, claims can be made from the Redundancy Payment Service (RPS) in respect of all employees including the directors and shareholders.  Provided that they are able to demonstrate that they were an employee of the company, then there is no reason why their claims will not be paid by the RPS from the National Insurance Fund.

If another company immediately takes over the trade of the insolvent company and the employees are transferred, then their claims will not be paid as their liabilities will be deemed to have been transferred to the successor company under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE).  

For advice or to obtain a competitive quote for carrying out a liquidation in these circumstances, please contact Robert Gibbons or Pam Green on 01827 60020.