Do’s and don’ts for directors

Do’s

• Act as quickly as possible as soon as you think there may be financial difficulties
• Notify the board, and hold regular board and management meetings
• Keep accurate minutes of meetings, so there is a record of what you have been doing to resolve the insolvency
• Keep a written record of all difficult decisions taken
• Keep accurate and up to date financial records, have a clear picture of assets and liabilities
• Sell assets for their true market value
• Submit tax returns and accounts on time, and pay taxes when they are due
• Respond to petitions within the time frame stated otherwise your business facilities may be frozen
• Communicate with staff, creditors, customers and your bank
• Make a plan for dealing with the insolvency and get the board to support it
• Take advice from professionals and keep a record of what they say

Don’ts

• Don’t keep trading if your are insolvent, unless you are sure you can turnaround your business
• Don’t write cheques or arrange more credit if you cant repay it
• Don’t accepts orders if your can’t fulfill them
• Don’t lie to your bank or creditors
• Don’t pay creditors in preference
• Don’t ignore final demands, judgments or petitions
• Don’t wait to see how things work out- take immediate action
• Don’t resign- as a Director you are responsible for implementing a procedure to deal with the insolvency
• Don’t waste time blaming people for what has happened – instead take action to resolve it