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Alex J.
Alex J., Solicitor
Category: Bankruptcy Law
Satisfied Customers: 3653
Experience:  Bankruptcy, liquidations, administrations, pre pack sales, re use of company names and director duties and offences.
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I am a director of a retail business which due to a lack of

Customer Question

I am a director of a retail business which due to a lack of funding we have had to stop trading and close the shop (yesterday). We have a charge on the business due to a loan from the bank, who have the right to appoint an administrator. We closed the shop COB yesterday and informed the bank today. Also today the landlord of the shop spoke with us and said that it would be best to surrender the lease back to them before the administrator is appointed. We have paid the rent upto 24th of June. Would really like some advise on this? Thanks.
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  Alex J. replied 3 years ago.
Him

Thank you for your question and welcome.

My name is ***** ***** I will assist you.

If an administrator is being appointed I would not take any further action. You have done the right thing be ceasing trading.

You cannot agree to surrender an asset of the company without the administrators permission. It could potentially create an offence under the Insolvency Act 1986 S.239 - it could be considered some kind of preference and make the directors personally liable for the company debts.

At the very least I would obtain permission from the administrator before taking such action.

To protect yourself personally you should go and obtain some advice from an insolvency practitioner or solicitor as to how to go about closing the business. The Insolvency Service acknowledge that taking professional advice and following it is one of the best defences against personal liability to company directors under the Insolvency Act.

I look forward to hearing from you.

Kind regards
AJ

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