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In a Creditors’ Voluntary Liquidation (CVL) the directors of a company are not automatically dismissed once the special resolution is passed placing the company in Liquidation. They lose their powers once a Liquidator is appointed, but retain their duties and, as such, they have a continuing duty to notify of key events relating to the company, such as when company has gone into Liquidation.
[See ‘Fiduciary Duty’, ‘Shadow Director’, ‘De Facto Director’, ‘De Jure Director’, ‘Non-Executive Director’, ‘Register of Companies’, ‘Companies House’, ‘Wrongful Trading’ and ‘Holding Out’.]
Section 7A of the Company Directors Disqualification Act (CDDA) 1986 (the extra section introduced by the Small Business, Enterprise and Employment Act 2015) requires officeholders to complete Director Conduct Reports.
Officeholders must submit conduct reports to the Secretary of State within three months of their appointment date. The Secretary of State may extend the time available to submit the conduct report on the application of the officeholder. If new information comes to the attention of the officeholder, they must send that information to the Secretary of State as soon as reasonably practical.
An online reporting tool is called the Director Conduct Reporting Service (DCRS); it is provided by the Insolvency Service. When the officeholder has logged onto the DCRS, they will be taken to a dashboard which will display all their cases where a report has yet to be submitted.
The DCRS is reliant for case data on the notices which IPs publish in the London and Edinburgh Gazettes, and because of this it will take at least two business days from the notice of the insolvency appointment appearing in the Gazette to the case appearing on the dashboard.
For Compulsory winding up cases in Scotland, if a decision is taken not to publish the appointment in the Edinburgh Gazette, the officeholder will need to contact the Insolvency Service, so that the case can be added to the system.
For cases where there are two or more officeholders (‘joint officeholders’), each will be able to view the case on their own dashboard and also complete and submit the conduct report if they wish. Underneath the case name, the dashboard will display the officeholder whose name appeared first in the Gazette notice.
