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What happens to me if the company goes into administration?

Published on : 2nd March, 2021 | Updated on : 27th January, 2025

Written ByGary Weber

Turnaround & Insolvency Manager (South)


07739 325 008

Gary has been with KSA since late 2010 and is now overseeing the work of all our Regional Managers as well as covering his own patch of the South East. He is passionate about helping companies having been an owner and a director of a number of businesses in industries including pubs, catering, road haulage, and retail. Gary drives our rescue work throughout central and west London, Surrey, W.Sussex, Berks., Bucks. and Oxon.

Gary Weber

Table of Contents

  • Can I be a director of a company in the future if this company goes into administration?
  • If I have provided personal guarantees will these be called in if the company goes into administration?
  • Will I be disqualified as a director is our company goes into administration?

What happens to me if the company goes into administration?

Answering simply, nothing. However, as a director of the insolvent company, if you have not acted properly, as you go through the insolvency process, you may face personal issues in the future.

When administrators are appointed then the directors’ powers cease. They are still responsible for their previous actions though. Usually the administrators will either sell the business quickly or if they trade the company in administration they will make the directors redundant as employees. So you will be sent home.

 

Can I be a director of a company in the future if this company goes into administration?

Yes, you can be a director of as many companies as you would like.  You may be part of a new company that is going to buy the business from the administrators. In which case you must get personal legal advice on conflicts of interest.

Make sure that the company name is acquired before re-using it. And it is obvious, what you shouldn’t do is to act irresponsibly when acting as a director of the old company and then set up another company and do the same silly things again.

Facts:

  • The law requires directors to keep up-to-date financial information and to understand the financial position of the company. If you fail to do this, legal action may be faced by a future administrator or liquidator.
  • Taking cash out of the company as drawings (not dividends) means that you owe the company money. This becomes an asset, a debtor and the administrators or future liquidators must collect that money or do a deal.

 

If I have provided personal guarantees will these be called in if the company goes into administration?

The answer is yes. It is very likely that if the company enters into administration, if you have provided security for company debts in the form of a personal guarantee , then this may be called in. If you’re in any doubt about this please call us . We can help directors with any related problems or queries.

 

Will I be disqualified as a director is our company goes into administration?

NO – as long as you have acted suitably, rapidly and responsibly . If you haven’t, and you knew the company was in serious financial difficulty then YES you may be disqualified…Take back control and protect yourself by asking for expert free help today! – call 0800 9700539

By failing to act and making creditors debts worse or running the company’s cash down to £0 to pay yourself, when other creditors are not being paid; likewise if you are taking some of the firms assets which do not belong to you, legal action by the future liquidator may be faced. But to do that, you would have to be extremely silly!

If you are thinking that the business will soon run out of cash then you must take advice now. Take back control and call us on (0800) 970 0539

Hobbycraft To Launch CVA to Close Stores And Negotiate With Landlords

​According to information obtained by Sky News, Modella Capital, a private investment business that specialises in acquiring struggling retailers, including WH Smith, will propose a company voluntary arrangement (CVA) at Hobbycraft as early as Wednesday. It has been reported that it will be FRP Advisory that will propose the CVA.People close to the plan stated that nine of its shops would be closed with the loss of around 100 jobs, and that 18 more would remain open only if negotiations with landlords over rent cuts work out.According to the individuals, 1,800 staff will be protected as an additional 97 stores will not be impacted by the CVA.Hobbycraft ‎is the latest in a series of High Street names to look at trying to reduce the size of their store portfolios amid rising pressures from online and discount rivals, increased employment costs and a deteriorating outlook for consumer confidence.Expensive High Street stores can be cut back provided that the lease allows for early termination.  If not the only way out is to surrender the lease that can be very expensive or use a company voluntary arrangement (CVA).A CVA allows the retailer to determine its lease obligations which can greatly help the company's cash flow. For more information on why a CVA is a perfect mechanism for helping retailers, read our retailer rescue page  Why not read our case study where we rescued a multi-store retailer

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Hobbycraft To Launch CVA to Close Stores And Negotiate With Landlords

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