If you’re the director of a limited liability company that goes into liquidation, you face little risk – provided that you’ve acted properly and in good time – but there are a number of consequences that you need to be aware of.
When a liquidator is appointed, most of your powers as a director will cease.
In the event that the company has a Supervisory Board, this body should approve the shareholders' resolution to dissolve the company.
If your company or organisation ceases trading or business activity, closes down or is forced to close down, you may still have to file Company Tax Returns and pay Corporation Tax during the closing or winding up process.
Unlike a permanent termination of business activity, a temporary termination does not give rise to any taxation.
During the liquidation you are allowed to act as the director of another company unless you are subject to a disqualification order, have given a disqualification undertaking or are an undischarged bankrupt.
A disqualified person needs permission from the court to act as a director or to take part in promoting, forming or managing a company.
Example: a business operator who is forced to temporarily stop his business activity during a period of medical convalescence.
A company that stops its business activity or whose manager/director leaves the company must report the termination of activity to the bodies and authorities to which it is affiliated or with which it is registered and proceed with the dissolution of the company.