Part 7 Common notices to be issued and actions to be taken
December 2011
3.109 Solicitors/Accountants – notice and collection of records
The company’s solicitors and accountants should be sent the form NORD2 which asks, amongst other things, for details of all books, documents, papers, etc. in their possession relating to the company’s affairs. Arrangements should be made for the delivery or collection of any accounting records, statutory books or other papers within 10 working days of the order. The official receiver should issue a receipt to the solicitors or accountants. See Chapter 10 for further information.
3.110 Solicitors/Accountants - lien unenforceable re records
If the solicitors or accountants attempt to claim a lien on the company’s records, it is unenforceable and reference should be made to paragraph 9.109 and Chapter 10, Part 7. For information and advice on steps to take in the event of an un-cooperative solicitor or accountant, please see Chapter 13, Part 2 and Chapter 64.
The official receiver should notify the company's bank as soon as practically possible (and certainly within five working days of the winding-up order) and should do so as soon as he/she obtains the bank's full address and account numbers. If the bank is informed promptly this may prevent any unauthorised withdrawal of funds by the directors. The official receiver should send the notice BANK1 to the company’s bankers. The letter provides a number of options for the official receiver to complete when dealing with company account(s). Whilst a local branch may be able to trace the company’s account from its name the official receiver should try to obtain account numbers before contacting the bank.
3.112 Banks – telephone enquiry
Banks will not normally provide any information concerning the company’s account over the telephone. The bank may not even confirm that an account is held without being contacted by letter. In cases of urgency, a bank may provide information after receiving a faxed notification of the order. In some cases the bank may be willing to accept a scanned copy of the order sent by email.
3.113 Banks – charge over the company’s property
It is important that the official receiver establishes early contact with the bank where the bank holds a charge over the company’s property. The official receiver should establish, as soon as practicable, whether the bank intents to appoint an administrative receiver. The official receiver should also read paragraph 3.126 as the bank may have a charge on the company’s book debts.
3.114 Banks – dealing with credit balances
Where the bank holds a credit balance (after taking in account any right of set-off) the official receiver should take a practical approach. The cost of the effort made should not be more than the amount realised. If the credit balance (or the sum of balances with one bank) is £50 or less, the ISCIS notice BANK 1 should be sent asking for the balance to be paid to the official receiver. The notice should be followed up by a telephone call and no more than one further follow-up letter. Where the credit balance exceeds £50, the official receiver should use his/her discretion as to the effort required from his/her staff to collect the monies. Part 3 of Chapter 31.5 provides further information on the realisation of cash at bank.
The official receiver should write to any creditor holding a fixed charge, including a mortgagee, using ISCIS form NLC. The reply may include the amount outstanding, the property covered by the charge or mortgage, details of any other security held, details of any insurance covering the charged property and details of any company bank account of which the charge-holder or mortgagee is aware. If the reply doesn’t include these details the official receiver should consider a further letter asking for this information. This may help the official receiver protect the company’s interest in the charged asset. After confirmation that the charged or mortgaged asset belongs to the company early enquiries into its value should be made. Paragraph 3.116 provides further information on dealing with a mortgagee who is taking action to realise their security.
3.116 Fixed and floating charges – possession proceedings
Where any action under a fixed and/or floating charge, for example possession proceedings, is pending when a winding-up order is made, the official receiver should inform the solicitors for the charge-holder or mortgagee of the order. The charge-holder or mortgagee can then consider making an application to the court for leave to proceed with the action [Note 1].
Where the company has employees the official receiver will generally terminate employment with effect from the date of the order. The official receiver should consult paragraph 62.20 where he/she continues the company’s business. Every employee, including company officers, who may have a claim for wages, holiday pay, payment in lieu of notice etc., and/or a redundancy payment should be sent the standard notice ISCIS word template form EMPLET. Additional information can be found in Chapter 8.
A company or partnership against whom a winding-up order is made may operate an occupational pension scheme for the benefit of employees. The official receiver has a statutory duty to send notice of an 'insolvency event' to The Pension Protection Fund (see paragraph 3.120), The Pensions Regulator (see paragraph 3.121) and the pension scheme trustees and/or managers (see paragraph 3.122) [Note 2]. Chapter 61 provides further advice on pension schemes. The notice is referred to as a 'section 120 notice'. The proforma form, entitled Section 120 Insolvency Event Notice, is available here. Whist this is only a suggested pro forma form the official receiver should use it where possible.
3.119 What is an ‘insolvency event’?
An ‘insolvency event’ with regard to companies and partnerships are defined in sections 121(3) and (4) of the Pensions Act 2004. The ‘insolvency events’ which the official receiver is required to provide notification to the relevant bodies in addition to the making of a winding-up order are as follows;
The appointment of a provisional liquidator is not an insolvency event and notification will only be required if a winding-up order is eventually made. The change of an office-holder in the same procedure, such as the handing over of a case to an insolvency practitioner, does not need to be notified.
3.120 The Pension Protection Fund
The official receiver is required to give notice to The Pension Protection Fund within 14 days of the ‘insolvency event’, or, after this time limit, within 14 days of becoming aware of the pension scheme. The address of The Pension Protection Fund is Knollys House, 17 Addiscombe Road, Croydon, Surrey, CR0 6SR. Their telephone number is 0845 600 2541. Their e-mail address is information@ppf.gsi.gov.uk. Further details about The Pension Protection Fund can be found here.
The official receiver should send notice to The Pensions Regulator at the same time to The Pensions Regulator, whose address is Napier House, Trafalgar Place, Brighton, BN1 4DW. Their telephone number is 0870 6063636 and their fax number 0870 2411144. Their e-mail address is customersupport@thepensionsregulator.gov.uk. Further information about The Pensions Regulator can be found here.
3.122 The pension scheme trustees or managers
The official receiver should also send notice to the pension scheme trustees or managers. This information should be supplied by the company officers, accountants, solicitors or be found in the company’s records.
3.123 Third parties holding company property
(Amended October 2012)
The official receiver should send notice to any person holding or thought to be holding any property of the company (including assignees of book debts or any other assets) to prevent assets being disposed of. If the assets are believed to be in jeopardy, they should be promptly collected. Where the company has assets that have been pledged or pawned reference should be made to paragraph 31.0.47A.
Where the company has any current insurance cover the official receiver should write to each insurance company and/or insurance brokers asking them to provide details of the existing insurance cover, quoting, when known, policy numbers. Further information can be found in Chapter 49 and in particular paragraph 49.20.
Where a company has book debts, which are not subject to a charge (see paragraph 3.126), at the date of a winding-up order, the official receiver should instruct his agent "the contractor" (see paragraph 31.1.4) to realise the book debts on his/her behalf. As the chance of recovering a book debt diminishes with time the contractor should be instructed as soon as possible even where an insolvency practitioner is likely to be appointed liquidator at the first meetings of creditors and contributories. Chapter 31.1 provides detailed guidance on book debts.
Where any book debts of the company are subject to a fixed charge (for example, paragraph 3.113) the official receiver should make early contact with the charge-holder. The official receiver should establish who will protect and collect the book debts. In the event that the charge-holder refuses to collect the book debts the official receiver will instruct the contractor to collect them as per the instructions in paragraph 31.1.46. Where there is an assignment of book debts or a factoring agreement, reference should be made to Chapter 31.1 generally and in particular Part 5.
3.127 Book debts – phoenix company
The official receiver should be aware that in some cases a phoenix company may be trading. In these instances he/she should instruct the contractor to collect the book debts to prevent the trade debtors making payment to the "live" company. Where the book debts are secured the official receiver should draw the attention of the charge-holder to the existence of the phoenix company.
The landlord of any premises occupied or rented by the company should be issued with the form NTL. The landlord may be a creditor, and the premises may contain company assets or records. Arrangements should be made for the collection of any books of account, statutory company records and other company papers at company premises within 10 days of the making of the order. See also Chapter 10, Part 2 for more information on obtaining custody of accounting records. Where the landlord has taken back possession or shows any intention of levying distress, the official receiver should consult Chapter 9.
3.129 Dealing with leasehold property
In the first instance the official receiver should obtain sufficient information from the landlord and the company officers to enable him/her to decide whether the lease is of any value to the estate. The official receiver may then decide to disclaim his/her interest in the lease or may require a further valuation prior to its sale. Further guidance on dealing with leasehold property can be found in Chapter 31.3, Part 5.
3.130 HM Revenue & Customs – Tax and National Insurance
The Insolvency Claims Handling Unit of the HM Revenue & Customs (HMRC) deal with claims in insolvency proceedings in respect of tax and National Insurance. The official receiver should ensure that the company’s case name and registered office is entered onto ISCIS as quickly and accurately as possible. This information is automatically extracted from ISCIS and sent to the Insolvency Claims Handling Unit at Longbenton. A paper copy of this information is not necessary. Further information on direct taxation is provided in Chapter 77.
3.131 HM Revenue & Customs – VAT
In the majority of cases dealt with by the Insolvency Service the company will be registered for VAT. In these cases the official receiver should complete HMRC form VAT 769 (notification of insolvency) as soon as possible after the making of the winding-up order. In completing the form the official receiver should indicate whether deregistration is appropriate. Where possible the VAT number should be provided, although this should not stop the official receiver completing the form where it is not known. If the VAT number is not provided HMRC will attempt to locate the case through its internal searches. HMRC would prefer the VAT 769 to be sent electronically to reduce the number of forms going astray. Further information on VAT is provided in Chapter 78.
(amended March 2012)
The VAT769 form can be found here. The completed form should be sent to insolvencyhelpdesk@hmrc.gsi.gov.uk. No other notification of the order is required. If the official receiver cannot send the form by e-mail it should sent by post to HMRC, VAT Operations Insolvency, 3rd Floor NW, Queens Dock, Liverpool, L74 4AA.
3.133 Contact with Crown Departments
The Insolvency Service has a dedicated intranet page dealing with contact with Crown Departments. This page includes the partnership agreement with HMRC amongst other matters and can be viewed here.
The official receiver should send ISCIS word template form NLC to all loan creditors. The early receipt of this information may assist the official receiver’s enquiries into the affairs of the company.
3.135 Third party owners – items on lease, hire, hire-purchase, etc.
The official receiver should send notice to the owners of any goods or property held by the company on hire, hire-purchase (form NHP.Coy), lease, on loan, for safety custody, for repair or otherwise, including suppliers of stock/goods where retention of title is claimed. The official receiver should follow the policy outlined in paragraphs 31.6.52 to 31.6.53 when dealing with third party goods.
The official receiver should send a notice to all credit/charge card companies where the company held an account. It is also important to give immediate notice where the company operated a facility for acceptance of payment by credit/charge card for its goods or services. The official receiver should try to obtain the account numbers from the company officers or the company’s records before sending the notice. Generally credit or charge card companies will be unable to trace an account without the account number(s). Any such notice is likely to be returned requesting the account number.
3.137 Business rates – local authority
The official receiver should send a notice to the local authorities where the company is responsible for the payment of business rates. In some cases where the company occupies a number of premises this may involve several different local authorities. The notice should quote the address(es) of the premises together with the reference number(s) if known. Where the company no longer occupies the premises the local authority should be informed as it may be the case that no further business rates may be incurred. If the company owns or leases the premises there may still be a liability for business rates even if the property is unoccupied.
3.137a Premises licensed to sell alcohol – local authority
The official receiver should inform the relevant local authority as soon as possible of the insolvency of a premises licence holder (see paragraph 59.81).
Details of the dedicated email address and telephone number for licensing notifications can be located on the web site of the relevant local authority.
Notice to the water companies is usually included in the standard notices package used by official receivers. In some areas there may be two water companies operating, one for the supply of fresh water, the other removes and treats waste water. The official receiver should issue a notice to appropriate water supply companies as soon as the relevant information (such as account numbers and/or addresses) becomes available. The contact details of water supply companies in the UK are available here.
The providers of utilities such as electricity, gas and telephone are now private companies. In many areas of the country there will be multiple service providers. In the initial stages of the liquidation the official receiver may have difficulty identifying the company’s supplier. The contact details of energy suppliers in the UK are available here.
3.140 Utilities other than water services – notice not normally required
There is no reason why the official receiver should treat the utilities differently to other trade creditors. In general the utilities should receive notification of the order when the report to creditors and meeting/no meeting notice are issued. However, there may be special circumstances, such as the continuation of a business or where information is required for the official receiver’s enquiries, when early contact with the supplier is necessary.
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