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How bankruptcy affects me

Bankruptcy and my business

Going bankrupt can have serious effects on your business and this must be considered before you take any action.

The effects bankruptcy will have on your business can differ between whether you're a sole trader or have a limited company.

Bankruptcy and your business: sole trader

If you’re self-employed you may be able to continue trading after you’ve declared yourself bankrupt. However there's no guarantee of this and there is the possibility that the official receiver dealing with your bankrupty will decide to sell the business.

In most cases, tools needed to do your job will be protected and the official receiver won’t try to sell them. But stock owned by your business is considered an asset and the official receiver may want to sell it.

If you have any employees they'll usually be dismissed and you'll have to hand over all business records to the official receiver.

Considering bankruptcy?

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Bankruptcy and your business: limited company

If you have a limited company you’ll not be allowed to continue as a director.

Once you’ve become bankrupt, you’ll not be allowed to take any part in promoting, forming or managing a limited company without the court’s permission.

During your bankruptcy you’ll not be permitted to trade in any business under any other name unless you first inform all persons concerned with the bankruptcy.

Get free bankruptcy advice

Bankruptcy and the impact it may have on a business is a complex area, so we recommend you contact us for further advice if you’re a sole trader considering bankruptcy.

Bankruptcy can affect your membership of any professional bodies.

If you’re currently trading as a limited company, partnership or limited liability partnership, you should contact Business Debtline for help before considering bankruptcy.