Administration and liquidation
Can directors sell company assets after an appointment? The records too
Updated
Before a winding-up petition or an appointment the directors decide for the company. In administration a director may not exercise a management power without the administrator's consent, and once a liquidator is appointed the directors' powers cease unless they are sanctioned, so a sale or licence of the records and data becomes the office-holder's decision.
Who decides, stage by stage
- Before any resolution, petition or appointment: the directors, acting for the company. After a winding-up petition, a sale is void if the court then winds the company up, unless it orders otherwise.
- A voluntary winding up with no liquidator yet appointed or nominated: the directors' powers may not be exercised except with the court's sanction, with narrow exceptions, among them doing what is necessary to protect the company's assets.
- Administration: a company in administration, or one of its officers, may not exercise a management power without the administrator's consent.
- Liquidation: on the liquidator's appointment the directors' powers cease, except so far as they are sanctioned to continue.
Source: Who decides about a closing company's records, quoted from the statute, the FCA and GOV.UK
The provisions
Paragraph 64 of Schedule B1 to the Insolvency Act 1986 says a company in administration or an officer of a company in administration may not exercise a management power without the consent of the administrator.
Source: Insolvency Act 1986, Schedule B1 (legislation.gov.uk)
Section 114 applies to a voluntary winding up in which no liquidator has been appointed or nominated by the company, and says the powers of the directors shall not be exercised except with the sanction of the court, or in a creditors' voluntary winding up so far as needed for the statement of affairs and the creditors' nomination of a liquidator. It does not stop the directors doing all such other things as may be necessary for the protection of the company's assets.
Source: Insolvency Act 1986, s.114 (legislation.gov.uk)
Section 103 says that in a creditors' voluntary winding up, on the appointment of a liquidator all the powers of the directors cease, except so far as the liquidation committee, or if there is none the creditors, sanction their continuance.
Source: Insolvency Act 1986, s.103 (legislation.gov.uk)
This sets out what the provisions say. Whether a particular sale is in the creditors' interest is the office-holder's own judgement, not something this page decides.
Source: Who decides about a closing company's records, quoted from the statute, the FCA and GOV.UK
Who buys from an office-holder
micro1's Defunct Company Data Partnership acquires data from companies that are no longer operating and shows $100K-$2M+ for approved data packages; Turing's Project Lazarus works with winding-down companies; SimpleClosure's Asset Hub sells a closing startup's code and workspace data to vetted AI buyers. Each of them is quoted from its own page on our buyer board.
Source: Company records buyers
Left out of any sale by an office-holder
- Personal data about customers and staff, which is the part an AI buyer is not paying for.
- Payroll, HR and health records.
- Client work held under a client's contract.
A note for the office-holder or the board
"The company's working records, its email, tickets, shared files and system histories with personal details taken out, may be worth something to AI buyers who publish terms for closing companies. Worth a short call before the systems are switched off?"
Bring the case
Tell us about the case: the company's sector, the years of records it holds and its systems, the stage of the case, and whether you hold the appointment or sit on the board. Selling before the company is wound up is on can a company sell assets before liquidation.