Version: 30 January 2013

CORPORATE SIMPLIFICATION PROJECT

DUE DILIGENCELOG AND QUESTIONNAIRE

Company Name:
Batch Number:

KEY DATES

Action / Deadline / Date completed
Due diligence to be completed
Outstanding due diligence issues to be resolved
Removal approved by Project Team
Application for strike off / commencement of liquidation

The purpose of this due diligence log and questionnaire is to document the process for identifying whether the Company can be removed by way of strike off or members' voluntary liquidation. It also summarises any issues which may need to be addressed before any strike off or liquidation is begun.

Relevant issues may relate to:

  • assets held by the Company which have a material value;
  • liabilities or claims against the Company;
  • contractual arrangements or commitments binding on the Company; or
  • licences, permissions, approvals or other relationships with regulatory bodies.

[For the purposes of this project, issues are considered to be material if they have a value of £[] or more.]

Each respondent named in the table on page 2 below is asked to:

  • complete the relevant section of the questionnaire on page 5 onwards relating to their subject area or function; and
  • following completion of the relevant section of the questionnaire, confirm in the table below, whether they are aware of any material issues which may indicate that the Company is not ready or suitable for removal.

If you have any queries please contact [ ], Telephone [ ], Email [ ].

MASTER DUE DILIGENCE LOG

Subject Area / Function / Name of respondent / Are there any circumstances which indicate that the Company should not be removed? / Confirmation by respondent (please insert initials and date)
Yes / No / Details if "Yes"
1. Corporate Simplification Project Team
2. Business Group / Directors
3. Company Secretarial
4. Finance
5. Tax
6. Treasury
7. Legal
8. Human Resources
9. Pensions
10. Intellectual Property
11. Health, Safety & the Environment
12. Insurance
13. Regulatory
14. Real Estate

OVERVIEW OF COMPANY STATUS

(To be completed by Corporate Simplification Project Team)

Company Name ("the Company"):
Batch number:
Previous Company names:
Company Number:
Country of Incorporation:
Date of Incorporation:
Principal Activities of Company (from last statutory accounts):
Shareholder(s) (number, class and denomination of shares held)
Directors (name and date of appointment):
Company Secretary:
Date of Last Accounts:
Dormant since:

SUMMARY OF ACTIONS TO BE COMPLETED PRIOR TO STRIKE OFF / LIQUIDATION

(To be completed by Corporate Simplification Project Team)

Possible Action / Yes / No / Comments
Tax clearances / X
Third party consents
Release from pensions obligations
Appointment of director(s)
Resignation of director(s)
Change of name
Change of articles of association
Transfer of shares in the Company
Reduction of share capital / share premium
Waiver of debt by the Company (subject to reserves)
Waiver of debt by intra-group creditor of the Company
Transfer of assets / business by the Company
De-registration of licences / approvals
Distribution of cash
Distribution of non-cash assets in specie (prior to strike off / liquidation)
Strike off
Commencement of Members Voluntary Liquidation
Recycled / re-used for another purpose
Other

QUESTIONNAIRE

  1. CORPORATE SIMPLIFICATION PROJECT TEAM

INFORMATION REQUIRED / RESPONSE
Review of last statutory accounts:
  • Complete relevant sections of the Overview on page 1

  • Amount of net assets

  • Any assets other than cash or intra-group receivables

  • Amount of reserves

  • Any other issues

Review of the Company’s statutory registers
  • Complete relevant sections of the Overview on page 1

  • Make copy of latest articles

Review of filings at UK Companies House:
  • Cross-check current shareholdings against last annual return

  • Cross-check date latest articles where adopted or amended

  • Any "live" mortgages or charges

Search of UK Register of Data Controllers (current Company name and any previous names)
Search of UK Land Registry (current Company name and any previous names)
Search of UK Trademark Register (current Company name and any previous names)
Search of UK Patent Register (current Company name and any previous names)
Search of registers of domain names (current Company name and any previous names)
Any other issues.
  1. Business Group / Directors

INFORMATION REQUIRED / RESPONSE
Why was the Company created / acquired?
How was the Company created / acquired?
Has the Company ever traded? If so, with whom has it carried on business?
Where has the Company carried on business? (UK / overseas)
If the Company is now dormant, when and how did it cease to trade? (e.g. transfer of trade / wind down of business)
Does the Company have any assets (other than cash and intra-group debtors)?
Does the Company have any liabilities (other than intra-group creditors)?
Have there been any other significant corporate transactions affecting the Company? If so, please provide dates and descriptions.
Is the Company an approved or preferred supplier in relation to any procurement arrangements operated by government agencies or third parties? If so, please provide details.
Should any external advisers or agents be contacted in relation to potential issues concerning the removal of the Company? If so, please give details.
Should any former directors or employees be contacted in relation to potential issues concerning the removal of the Company? If so, please give details.
Any other issues.
  1. COMPANY SECRETARIAL

INFORMATION REQUIRED / RESPONSE
Where are the Company’s statutory registers held?
Review of the Company's minute books covering the last [7 years] – do they indicate:
  • Leases or real estate

  • Guarantees / indemnities

  • Bank accounts

  • Ongoing assets, liabilities, contracts, licences

  • Significant transactions

  • Any other issues

Review of the Company’s current articles of association:
  • Classes and denomination of shares

  • Quorum for board meetings

  • Quorum for written resolutions of directors

  • Quorum for shareholder meetings

  • Restrictions on reduction of share capital

  • Power to make interim distribution in specie

  • Power to make distribution in specie in liquidation

Details of any share options granted by the Company
Details of any subsidiaries or shares held by the Company
Details of any directorships or other offices held by the Company
Any other issues.
  1. FINANCE

INFORMATION REQUIRED / RESPONSE
Details of any journal entries or events following the last annual accounts
Has the Company given or received a letter of support/comfort? If so, please provide details.
Are all of the Company’s reserves distributable?
Are there any unclaimed dividends/dissenting shareholders’ funds?
Details of any intra-group debtors – please list names and amounts, and whether each balance is interest-bearing
Details of any intra-group creditors – please list names and amounts, and whether each balance is interest-bearing
Details of anythird party debtors – please list names and amounts, and whether each balance is interest-bearing
Details of anythird party creditors – please list names and amounts, and whether each balance is interest-bearing
Details of any subsidiaries or investments
Review of annual accounts for last [7 years] for reference to:
  • Letters of comfort / support

  • Pensions issues

  • Employees

  • Contingent liabilities

  • Rents received or paid

Any other issues.
  1. TAX

INFORMATION REQUIRED / RESPONSE
Is the Company dormant for UK corporation tax purposes?
Tax district – reference, address and name of inspector.
Is the Company registered for VAT or part of a Group registration? VAT Registration No.
Local VAT office and address.
Is the Company exempt/partially exempt for VAT purposes? Is it subject to any special VAT rules (e.g. capital goods scheme)?
Is the Company registered for PAYE?
Has the Company been involved in any tax planning in the last 7 years? If so, please provide details.
Does the Company hold any assets? If so, what are the tax consequences of transferring those assets (including VAT and Stamp Duty issues)?
Has HMRC been notified of the proposed striking off/liquidation?
Is the Company close for tax purposes?
Detail current status of:
  • Tax returns and computations;

  • Claims/Elections (including group relief) highlighting any pre-liquidation claims/elections still to be made;

  • Tax payments, together with details of expected tax owed or refunds due on pre-liquidation tax returns not yet submitted;

  • current open HMRC enquiries and expected outcomes

What are the tax implications of entering into liquidation? In particular:
  • potential degrouping charges for company and other members of the group under the capital gains tax, loan relationship, intangible fixed assets and/or derivative contracts rules;

  • consider whether any stamp duty/SDLT reliefs might be denied/clawed back as a result of striking off/liquidation

  • tax consequences of liquidation distributions (see section 1030A Corporation Tax Act 2010);

  • overseas tax implications;

  • tax indemnities provided by the company which remain extant;

  • consider effect of company ceasing to trade or to have an investment business on appointment of liquidator;

  • consider effect of company ceasing to be the beneficial owner of its assets on the appointment of a liquidator;

  • consider effect of company's accounting period ending immediately before the winding up starts;

  • consider whether the liquidation/striking off could result in any loans owed to the Company being released.

Document the impact on the parent company where there will be capital gains on potential liquidation
Consider the Company's debtors and creditors in relation to:
  • UK to UK and/or UK to overseas intra-group debts. Will any interest be imputed?

  • Method of discharge

If the Company has employees:
  • Does it operate any non-standard payroll arrangements which would need to be replicated in a new employer company?

  • Does it have any special agreements with HMRC?

Does the Company have any overseas branches or establishments? If so, please provide details.
Are there any other tax matters to consider such as notifications or clearances?
Who are the Company's tax advisers and main contact?
Who will be responsible for completing/dealing with outstanding pre-liquidation tax and VAT returns and any enquiries arising?
Any other issues.
  1. TREASURY

INFORMATION REQUIRED / RESPONSE
Please provide details of any of the following in relation to the Company:
  • Bank accounts

  • Cash pooling

  • Letters of credit

  • Guarantees or indemnities

  • Certificates of deposit, bills of exchange or promissory notes.

Does the Company participate in any external loan facilities? If so, please provide details.
Has the Company issued any securities? If so, please provide details.
Any other issues.
  1. LEGAL

INFORMATION REQUIRED / RESPONSE
Has there been any litigation, arbitration, claims or threatened claims affecting the Company? If so, please provide details and confirm whether they have been settled / extinguished.
If the Company has third party shareholders, details of any shareholders’ agreement affecting the Company.
Review of any registers of contracts or similar records – provide details of any ongoing:
  • contracts

  • undertakings

  • assets held on trust

Review of any significant transactions affecting the Company in the last [7 years] – provide details of any:
  • Assets

  • Liabilities or obligations

  • Contractual rights

  • Other issues

Details of any overseas branches or places of business.
Details of any alleged non-compliance with any anti-trust / competition laws or any investigations, allegations or proceedings involving the Company.
Should any external advisers or agents be contacted in relation to potential issues concerning the removal of the Company? If so, please give details.
Any other issues.
  1. HUMAN RESOURCES

INFORMATION REQUIRED / RESPONSE
Has the Company ever had any employees?If so, please provide details, including details of any termination or transfer of employees.
Does the Company have any employees who are working under work visas / work permits? If so, please provide details.
Has the Company ever engaged any consultants, contractors or agency staff? If so, please provide details.
Details of any ongoing employment claims against the Company including labour disputes, whether existing or threatened.
Details any arrangements to hold shares for the benefit of employees.
Is the Company a trustee for any or employee benefit trust? If so, please provide details.
Any other issues.
  1. PENSIONS

INFORMATION REQUIRED / RESPONSE
Has the Company ever participated in any occupational pension schemes for the benefit of employees? If so, please provide details.
How and when was the Company released from its obligations/liabilities to any pension scheme?In relation to any pension scheme that provided benefits on a defined benefit basis, please confirm that evidence is available either that either the Company paid the statutory debt under section 75 of the Pensions Act 1995 in full or that no debt was due
Is the Company a trustee for any pension scheme or employee benefit trust? If so, please provide details.
Any other issues.
  1. INTELLECTUAL PROPERTY

INFORMATION REQUIRED / RESPONSE
Please provide details of any intellectual property rights registered in the name of the Company or beneficially owned by the Company (e.g. trade marks, trade names, domain names, patents, copyrights etc.)
Please provide details of any intellectual property used by the Company but owned by a third party.
Is the Company’s name required?
Any other issues?
  1. HEALTH, SAFETY AND THE ENVIRONMENT

INFORMATION REQUIRED / RESPONSE
Please provide details of any environmental licences, consents, permits and authorisations, registrations and exemptions.
Please provide details of any communications with HSE regulators (e.g. environmental agency or authority) relating to non-compliance issues, enforcements, required works and permit revocations / modifications.
Please provide details of any existing, pending or threatened investigations, litigation or other dispute resolution proceedings brought by a third party (including any regulatory authority) whether civil, criminal or regulatory, relating to HSE matters.
Please provide any details of any liabilities for HSE matters or rights of recovery for health and safety liabilities that any third party may have in relation to the Company under contracts or leases relating to the ongoing business operations of the Company.
In respect of employees or third parties, please provide details of existing, pending or threatened claims for accidents and /or occupational diseases or injuries attributed to the Company.
Please provide details of any claims made or threats relating to health and safety issues received from any non-governmental third party arising from the operations of any site, e.g. noise, dust, smells, emissions, contamination, migrating off site etc.
Please provide details of any environmental penalties and fines (amounts due and outstanding) to be paid by the Company due to non-compliance with health and safety laws.
Any other issues?
  1. INSURANCE

INFORMATION REQUIRED / RESPONSE
Please provide details of any insurance policies that the company has, including Employers’ Liability insurance
Please provide details of any current or pending insurance claims against the Company, including an estimate of when the claim(s) are likely to be resolved.
Has the current insurer agreed to take on any claims post liquidation and agreed that the Company can be liquidated? If the insurer needs to be contacted to confirm this, please state this.
Please provide details of any local mandatory insurance policies.
Any other issues?
  1. REGULATORY

INFORMATION REQUIRED / RESPONSE
Is the Company regulated by any authority such as the FSA, Stock Exchange etc? If yes, please provide details.
Please indicate whether there are any regulatory matters relevant to the Company and provide details.
Any other issues?
  1. REAL ESTATE

INFORMATION REQUIRED / RESPONSE
Has the Company ever held any freehold or leasehold property? If so, please provide details.
Please provide details of any rights of way, access rights, through-put rights, easements or other rights over the land of third parties which are necessary for the operation of the Company.
Please provide details of any grants of security, liens, encumbrances, restrictions, rights of way or easements over land.
Please provide details of any disputes and litigation relating to the owned or leased properties (if any) of the Company.
Any other issues?

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