Naturalisation. Good character. Financial soundness. Liquidation of your company

If you apply to naturalise as a British citizen, you must be of good character. One of the factors considered when assessing your character is your financial soundness.

The liquidation or “winding up” of a limited company in which you have been a director or a manager may be an issue affecting your financial soundness, depending on the circumstances.

When the company stops doing business and employing people, it may be removed (‘struck off’) from the companies register at Companies House. In the process of a voluntary liquidation following a voluntary strike off, the company’s assets are used to pay off its debts, and any money left goes to shareholders. This process is called “members’ voluntary liquidation”.

But if the company cannot pay its debts, it may be forced into a liquidation in which creditors may be involved (in a process known as “creditors’ voluntary liquidation”), or by a court to which you applied with the help of an authorised insolvency practitioner (“compulsory liquidation”).

If you have been a director or involved in the management of a company that has been forced into liquidation, your application for naturalisation can still be granted if the company was liquidated over 10 years ago, or if the company went into liquidation through little or no fault of your own. The example given by the Home Office in their official guidance on the good character requirement is the situation where you may have simply been a victim of the poor business decisions of others, or where the business has been severely affected by an economic downturn.

The caseworker will assess the scale of the liquidation, the economic circumstances, the mitigating circumstances, and will make a judgement about how culpable you were.

If you were reckless or irresponsible, and especially if you have been disqualified from being a director or taking part in the management of a limited company, your application will normally be refused. If you deliberately relied on a recession to avoid payment of taxes or payment to creditors, your application will also normally be refused.

If you want to apply for British citizenship or for a British passport and need specialist advice, feel free to contact me. Please note that I am an accredited immigration adviser, not an employee of the UK Visas and Immigration. I charge fees for the advice provided.