The winding–up order is the moment the company stops being yours to run. From that point, control passes to the Official Receiver and a statutory investigation begins. This chapter walks through what happens immediately, what you still need to do as a former director, and what the investigation looks at in practice.
What just happened
When the court makes a winding–up order, several things take effect at the same moment.
The company enters compulsory liquidation, the directors’ authority over the company ends, and the Official Receiver becomes the liquidator by default, taking responsibility for the company’s affairs from that point. The court order is recorded at Companies House and the company status changes accordingly.
Employees are dismissed by operation of law. This is automatic and effective from the date of the order, regardless of contractual notice periods. Outstanding wage claims become preferential debts in the liquidation, and employees can claim statutory minimums (redundancy pay, unpaid wages up to a cap, holiday pay, statutory notice) from the Redundancy Payments Service.
The bank account is closed and any funds in it are transferred to the Official Receiver. Anyone holding company property becomes obliged to deliver it up on request.
From this moment, the company exists as a legal entity, but only for the purposes of liquidation. The trading business is over.
What the Official Receiver does first
The Official Receiver is a civil servant from the Insolvency Service who acts as liquidator from the day of the order. Their statutory job is to secure the company’s assets, identify the creditors, investigate the conduct of the directors, and report to the Secretary of State.
In the first two weeks, the Official Receiver will typically:
- Take possession of company records (books, computers, contracts, bank statements, accounting files)
- Notify the company’s bank, landlords, insurers, and major creditors
- Place a notice of liquidation in the London Gazette
- Issue a questionnaire to the directors, often called the Statement of Affairs paperwork or the Preliminary Information Questionnaire
- Set up an interview with each director, either in person at an Official Receiver’s office or by telephone
The questionnaire is the formal record of what the company owed, what it owned, and why it failed. The director is required to complete and sign it, and inaccurate or incomplete answers carry their own consequences.
The interview is where the conduct review begins in earnest. It is typically the first detailed conversation between you and the Official Receiver, and it sets the tone for the wider investigation.
Your duties as a director from this point
Your authority over the company ends with the order, but your duties to the liquidator continue. The Insolvency Act sets out specific obligations on directors during the liquidation:
- Deliver up all company property still in your possession to the Official Receiver
- Provide a complete and accurate Statement of Affairs within 21 days of the request
- Attend interview when called
- Cooperate with reasonable requests for documents, explanations, and information
- Tell the Official Receiver about any matter relevant to the liquidation that comes to your attention
Falling short on cooperation has direct consequences. The Official Receiver can apply to the court for a public examination, which is an examination on oath in open court. Persistent non–cooperation can also be a factor in director disqualification proceedings, and in some cases it is a criminal offence.
What you can do, however, is exercise care in how you cooperate. You retain the right to take legal advice, to ask for time to gather records, and to have a solicitor present at interview. Where an answer would tend to incriminate you, the privilege against self–incrimination applies, though it is narrow in this context.
This is the point where most directors benefit from specialist representation. The conduct review is already underway in the background, and how you engage with it materially affects what follows.
The investigation into director conduct
The Official Receiver’s investigation has two tracks running side by side: the practical liquidation, where assets are realised and distributed to creditors, and the conduct review, which examines how you behaved as a director in the period leading up to insolvency.
The conduct review is the basis for two specific downstream risks.
- Personal liability claims under the Insolvency Act 1986, principally wrongful trading (section 214), fraudulent trading (section 213), misfeasance (section 212), and preferences or transactions at undervalue (sections 238 to 241).
- Director disqualification proceedings under the Company Directors Disqualification Act 1986, which can ban you from acting as a director for between 2 and 15 years.
The conduct review looks at a defined set of behaviours, typically over the two or three years before the winding–up order. The key questions the Official Receiver works through include:
- When did you know the company was insolvent or likely to become insolvent?
- After that point, what did you do to minimise loss to creditors?
- Did you continue to take payments out of the company (salary, dividends, director loans) once insolvency was a real prospect?
- Did you prefer some creditors over others, for example paying connected creditors while leaving HMRC or trade creditors unpaid?
- Were tax returns and statutory accounts kept up to date?
- Were director duties under the Companies Act maintained throughout?
The standard the Official Receiver applies is, broadly, what a reasonable director with the skills you actually had and the information you actually possessed would have done in the same circumstances. It is an objective test informed by your specific position.
What can still be influenced
Once the winding–up order is made, certain things are fixed, including the order itself. The company is in compulsory liquidation, and the court does not generally reverse that decision.
Several other things remain influenceable, however, and what you do in the weeks and months after the order materially affects the outcome.
- How you cooperate with the Official Receiver. Prompt, complete, and well–prepared cooperation reduces the duration and intensity of the investigation, and it matters in the conduct review.
- Whether the liquidation moves to a private Insolvency Practitioner. Creditors can vote to replace the Official Receiver with a licensed IP at a creditors’ meeting. Where there are assets to realise or complex matters to investigate, this often happens, and it changes the dynamics of the case.
- The records you produce. Detailed, contemporaneous records (board minutes, management accounts, professional advice received, communications with HMRC) provide the evidence base for any defence to wrongful trading or misfeasance claims later.
- Your engagement with specific creditors. Some creditors are willing to compound or compromise certain claims where engaged constructively, including HMRC in some circumstances and personal guarantee creditors more often.
- Defence preparation for any conduct claims that follow. The investigation typically runs for several months. The window for preparing a defence to a wrongful trading or disqualification claim opens at the point of the order, and the strongest defences are the ones that begin early.
Personal liability and disqualification
The two formal downstream risks are wrongful trading and director disqualification. Both are summarised here, with the detail covered in Chapter 05, which is the dedicated director investigations chapter.
Wrongful trading. Under section 214 of the Insolvency Act 1986, a director can be ordered to contribute personally to the company’s assets where they continued trading after the point at which they knew, or ought to have concluded, that there was no reasonable prospect of avoiding insolvent liquidation. The defence is that the director took every step a reasonable director would have taken to minimise loss to creditors from that point forward.
Director disqualification. Under the Company Directors Disqualification Act 1986, the Secretary of State can apply for a director to be disqualified for between 2 and 15 years where their conduct makes them unfit to be a director. Disqualification undertakings, which are voluntary agreements with the Insolvency Service, resolve a substantial proportion of cases without contested court proceedings.
The most common conduct findings in disqualification cases are continued trading while insolvent, failure to keep proper accounting records, failure to file accounts and tax returns on time, payment of dividends or director benefits while creditors went unpaid, and treatment of Crown debts (PAYE, NIC, VAT, Corporation Tax) as a source of working capital rather than as current liabilities.
Personal Liability Notices for unpaid PAYE and NIC are introduced in Chapter 02 and covered in depth in Chapter 05. Where HMRC was a significant unpaid creditor at the date of liquidation, PLNs are a serious risk and benefit from early specialist input. The same conduct findings that drive a disqualification case can also support a PLN.
Where HMRC sits in this
Where HMRC was the petitioner, or a significant unpaid creditor at the date of the winding–up order, HMRC will have specific interests in the liquidation that go beyond ordinary creditor recovery.
HMRC will typically review the company’s pre–liquidation behaviour for indicators of fraud or neglect that could support a Personal Liability Notice against a director under section 121C of the Social Security Administration Act 1992. This review runs in parallel with the Official Receiver’s conduct review, but with HMRC’s specific angle on unpaid tax debts.
HMRC will also assess whether there is any prospect of recovery from the company’s assets, and where pre–liquidation transactions look reviewable (preferences, transactions at undervalue, assets transferred to connected parties), HMRC will press the Official Receiver to investigate. In appropriate cases, HMRC can also bring its own claims directly.
The period between the winding–up order and HMRC’s substantive conduct assessment is the most decisive window most directors have left. The directors who use that window well, with proper representation, are usually the ones who avoid the worst outcomes downstream.
The practical effect is that a coordinated response in the weeks after the winding–up order, addressing both the Official Receiver process and the HMRC angle, produces a materially better outcome than dealing with each in isolation. Directors who engage with HMRC proactively at this stage, before HMRC’s position hardens, also typically have more options on the table.
What this means today
The winding–up order is a hard turning point, and the period that follows is more procedural than most directors expect. There is a defined sequence (delivery of records, Statement of Affairs, director interview, ongoing investigation), and there are specific downstream risks (PLNs, wrongful trading, disqualification) with specific defences.
The single most important decision in the days after the order is whether you face the investigation alone or with specialist representation. Most directors who go through this process without representation find themselves answering questions in ways that close off defences they could have run later.
If your company has been wound up and you’d like to talk through the position, book a free thirty–minute call. The conversation often makes the difference, and it is most useful early.
