This becomes an issue when you have paid in advance for goods and services, or they are specialist sole suppliers.
Well what can you do ?
Business owners who are sole traders or in partnerships are still liable after trading has ceased. Unless the owners become personally bankrupt you can challenge them through the courts, if discussions fail.
The administrator decides the future of the company, whether to rescue, sell on or put the company into liquidation. Putting a company into administration usually incurs expensive administration fees in addition to the company’s existing debts. These fees along with banks and other secured debts are generally paid out first.
- You can approach the administrator to request a refund of your deposit, but they are not obliged to pay if there is not enough money to repay you.
- Where unfinished services are being provided, you can discuss this with the administrator, but he is under no obligation to get the work completed.
- If goods were put by, you can request their delivery, or enter discussions with the administrator to buy them.
- Companies sold to new owners can be approached over transactions with the old company, but they can refuse to help.
The liquidator will use the company’s assets to clear debts and money owed to secured creditors. He will ensure that the company is closed down in way which meets legislative requirements.
- Any stock will be sold to clear debts (even if you have already paid for some of it). You may be able to negotiate the purchase of your goods at a ‘knocked down’ price with the liquidator.
- The liquidator is not obliged to finished uncompleted work, so the only thing left would be to go through the courts once the secured debts have been cleared.
Larger creditors may consider buying the assets of the company via a pre-pack arrangement.