What happens in a liquidation investigation?
A liquidator reviews why the company failed, what happened to its assets and how directors managed its affairs. Questions about trading, tax, borrowing and payments are part of that process. An investigation does not by itself mean a director has committed misconduct.
Business Insolvency Helpline • Checked 1 November 2026
General guidance, with procedural detail focused on England and Wales. Rules and routes can differ in Scotland and Northern Ireland.
What questions will the liquidator ask?
Expect to explain when financial problems emerged, how decisions were made and what information the board relied on. Questions may cover payments to directors, asset sales, dividends, loans, related businesses and the use of emergency funding.
Prepare a factual chronology. Match important decisions to accounts, bank entries, correspondence and advice. If a figure is uncertain, identify the evidence needed to confirm it instead of giving an unsupported answer.
What is a director’s conduct report?
The office-holder reports on directors’ conduct to the Insolvency Service. That report is distinct from a creditor progress report and from any court decision. Further enquiries may follow where concerns arise; insolvency alone is not an automatic ban.
Former directors can also be asked about their period in office. Resigning or handing records to an accountant does not make earlier decisions disappear.
How should I respond?
Preserve records, meet reasonable information requests and explain missing documents promptly. Directors have a duty to co-operate with the office-holder. If a letter alleges wrongdoing, obtain independent legal advice and distinguish a routine information request from a proposed recovery claim or disqualification action.
Do not alter records, backdate minutes or coordinate inaccurate explanations. A clear account of what actually happened is more useful than a polished account that cannot be supported.
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Related questions
The office-holder decides what information and meetings are needed. Be prepared to answer questions even if another director handled day-to-day finances.
No. Liability depends on the relevant legal grounds and facts, not simply on a report being submitted.
No. Former directors may still have duties to provide information and assistance about the company’s affairs.
Sources checked for this guide
- Director information hub duty to co operate with office holder (www.gov.uk)
- Director information hub consequences for directors (www.gov.uk)
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