Published: 11th May 2017
When a company is forced into liquidation, the Official Receiver (OR) has a duty to investigate the circumstances in which insolvency occurred, and decide whether or not the directors have acted correctly.
Official Receivers are notified when a winding up order has been issued, and work to establish the cause of each insolvency. They are civil servants who work on behalf of the courts, helping to protect the public from unscrupulous directors who defraud, or deliberately act against creditor interests.
For this reason, company directors are duty-bound to assist the Official Receiver in these instances, and will be invited to answer questions in an interview at the OR’s local office.
The Official Receiver’s office will contact a director whose company has been liquidated, usually within two working days of receiving notification of the insolvency. If there are urgent matters that need to be dealt with, however, they may speak to a director straight away.
Sometimes a questionnaire is used to gain an initial view of a company’s financial position leading up to the liquidation, and this will form the basis for further questioning during in-person interviews.
When directors are called for interview, it is important that they take the completed questionnaire, along with any documentary evidence to support their answers. Supporting evidence might include the company’s accounting records, last set of full accounts, bank and credit card statements, and any loan or hire purchase agreements.
When called for an interview, directors should contact the OR’s office to confirm their attendance, or if necessary, request more time to gather together the necessary financial paperwork.
Interviews can take up to three hours in total, but this depends on the complexity of the case. A member of the Official Receiver’s staff will go through the questionnaire, and ask questions to expand on various points.
The questions are likely to cover:
In essence, the Official Receiver will be trying to establish whether directors have acted wrongfully or fraudulently, and if they should have taken a different course of action at any point, to minimise losses for creditors.
The financial documents will be scrutinised by the Official Receiver, and retained by their office. Directors are free to ask questions about the investigation whilst at interview, to find out more about likely proceedings in the future.
Directors may be asked to return for a second interview under some circumstances, for example if there is insufficient evidence to support the answers to their questions, or the OR needs more time to complete their enquiries.
If you are concerned about an interview with the Official Receiver following the liquidation of your company, Real Business Rescue can help. Our insolvency practitioners will offer professional advice and guidance on the questions you might face at interview, and the potential repercussions of compulsory liquidation for you as a director.
Call one of the team to arrange a free same-day meeting. Real Business Rescue provide director advice online, over the phone, or in-person at one of our 78 UK offices or a place of your convenience. you are able discuss your situation in complete confidence.