What is the effect of liquidation on the directors?

A company director is anyone holding the position of Director, as well as anyone who is not officially a director but acts in that capacity.

Directors remain at the company after the commencement of the liquidation, but their powers are limited. They must cooperate with the Official Assignee so the affairs of the company are fairly and equitably resolved.

Directors are required to complete a Statement of Affairs form which includes:

• A brief description of the company’s history
• Trading details
• Details of the cause of the company’s failure
• All company assets
• All company liabilities
• All shareholder information
• Any legal claims pending by or against the company.

This information must be supported by relevant documentation (for example, financial reports, accounting records and bank statements).

The Official Assignee will decide if directors have a personal liability to the company, and identify any payments made by the company that may be reversed (for example, if company assets were sold for less that their proper value).

Directors must comply with requests from the Official Assignee to deliver any company property held.