Bankruptcy for company directors
What to do if you are the director of a company and need to declare bankruptcy.
If you are the sole director of a limited company and declare bankruptcy, you must cease acting as a director. Any shares you own in a company will be passed to the Trustee of your estate. The Trustee will seek to realise any value there is in these shares by selling them or winding up the company.
The Official Receiver (OR) (who is both a civil servant in The Insolvency Service and an officer of the High Court) will be appointed to deal with your bankruptcy. The OR will act as trustee of your estate unless an insolvency practitioner is appointed.
If you are not a shareholder in the company and the company wishes to continue, you can appoint another director. This appointment must happen before bankruptcy proceedings begin. Be aware that managing or promoting your company is prohibited until your bankruptcy is discharged. If you fail to appoint another director, or a third party shareholder fails to do so, the Trustee may appoint someone or may wind the company up.
If the company has multiple directors, you should inform the other directors immediately and resign your position with Companies House. Find further information on how to .
Any personally owned business assets will be claimed by the trustee unless they are exempt - see how bankruptcy affects your assets and bank account.
Bankruptcy for partnerships
If you are, or were, running a business in partnership (even if there is no formal partnership agreement) you can still apply for your own bankruptcy - see how to petition for your own bankruptcy. Unless there is a clause in the partnership agreement to the contrary, then the partnership will cease on your bankruptcy.
Your interest in the partnership will vest in the Trustee of your estate and they will seek to realise this. Even if there's a clause that means the partnership is not automatically terminated, then the Trustee will still be able to realise your share of the partnership assets.
If all the partners want to be made bankrupt, then they should apply for a joint bankruptcy petition under the Insolvent Partnerships Order (Northern Ireland) 1995. Form 16 is required and is available from the Bankruptcy and Companies Office at the High Court. Find .
The cost is the same as an individual presenting their own bankruptcy petition - see the costs involved in making yourself bankrupt.
When the bankruptcy orders are made this dissolves the partnership. All debts of the partnership, not covered by partnership assets, are included in each of the bankruptcies, under the principle of joint and several liability.
The Department for the Economy (DfE) provides further advice on .