Ltd co never paying its debts and transferring assets to a new Ltd.

Skag

What's stopping a director of a Ltd co transferring all its assets to a new Ltd, and then winding up the old company, in case someone takes it to court claiming money?

Maybe the director can do this over and over again, thus never paying any CCJ or debts, and always transferring his assets from one company to another. Am I missing something?

DullGreyGuy

You are missing the role of the Official Receiver/ Insolvency Practitioners and the powers they have

The original company would then be insolvent if there is a CCJ they don't have the ability to satisfy, the OR/IP would see that assets were transferred without due consideration being paid and at a minimum it's likely the person will be barred from being a director but can also become personally liable for the debts. They can also reverse unlawful transactions thus reinstating the assets back to the original company. 

Skag

DullGreyGuy said:

You are missing the role of the Official Receiver/ Insolvency Practitioners and the powers they have

The original company would then be insolvent if there is a CCJ they don't have the ability to satisfy, the OR/IP would see that assets were transferred without due consideration being paid and at a minimum it's likely the person will be barred from being a director but can also become personally liable for the debts. They can also reverse unlawful transactions thus reinstating the assets back to the original company. 

So what you say is that the OR/IP would reverse transactions in order to pay outstanding debts in the wound up company?

DullGreyGuy

Skag said:

DullGreyGuy said:

You are missing the role of the Official Receiver/ Insolvency Practitioners and the powers they have

The original company would then be insolvent if there is a CCJ they don't have the ability to satisfy, the OR/IP would see that assets were transferred without due consideration being paid and at a minimum it's likely the person will be barred from being a director but can also become personally liable for the debts. They can also reverse unlawful transactions thus reinstating the assets back to the original company. 

So what you say is that the OR/IP would reverse transactions in order to pay outstanding debts in the wound up company?

They have the power to if they deem it a simple case of trying to hide assets, or they can make the director pay it out of their personal wealth. 

Obviously, if they choose to exercise their powers is another question.