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Directors who are considering entering liquidation often have many questions. One of these questions may be the following: Can I move my assets out of my business before it goes into liquidation?

Those who are thinking ahead about their business and liquidation might be thinking of ways they can make the situation better. You might be wondering what to do with your assets.

If you think you’re going to become insolvent, you have to be really careful. Here are some examples of company assets that you might have.

  • Plant & machinery
  • Stock
  • Vehicles
  • Cash in the bank
  • Money owed from customers

You must think really carefully before you start to move any of your assets. As a director, ultimately, it’s up to you. You could sell the plant and machinery, stock and more. But when you enter insolvency, an insolvency practitioner is going to look very closely at your actions as a director.

In order to use a formal liquidation procedure, you need to appoint an insolvency practitioner.  They will be looking closely at times when large transactions have been made out of the company accounts and how assets have been sold. When they identify these things, they’re going to start asking questions.

Selling assets for low prices or gifting them is known as selling assets undervalued. This can land you in big trouble when it comes to insolvency. It will be labelled as misfeasance, which is when a director has breached their fiduciary duties.

How to sell assets correctly

As a company director, of course, you can sell your assets. However, when doing so, you must ensure that all assets are independently valued and make sure you get the valuation agreement in writing along with a sale and purchase agreement. This means that you have evidence ready if you do end up entering liquidation.

If you’re considering these questions, it’s likely time to seek insolvency advice. We’re here to help you as the director and can offer honest advice regarding your situation.

Author Bio

I'm Chris Worden, Managing Director at Director First. With over 7 years of experience, I help UK directors navigate the complex world of UK corporate insolvency. We offer free and independent advice to UK directors and advise them about what options may be available to them if their limited company starts to struggle.

I am passionate about helping other directors overcome their business challenges and get back on their feet, as I was once in the same position as them. I had a business that became insolvent, and the advice out there was confusing and overwhelming. I am here to provide honest and valuable advice to UK directors.

I am proud to say that we are one of the only 5-star corporate insolvency companies on Trustpilot with hundreds of 5-star reviews, and we publish videos weekly on our YouTube channel. Our channel is designed to educate UK directors about insolvency and debt advice.

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