The liquidator is required to agree and pay the claims of creditors before a distribution is declared to members. It is a statutory requirement that creditors are given an adequate period in which to formulate and submit their claims. However, it is likely that HMRC will be unable to submit their claim promptly.
Should you wish to receive a distribution as soon as possible, the liquidator will request that you sign a form of indemnity. Assuming that the liquidator receives the forms of indemnity from all the members, the liquidator shall then be in a position to declare an ‘advance distribution’. It is essential that all the members sign indemnities, as in the event that one or more members does not agree to sign the indemnity, then it will not be possible to declare a distribution until the claims of all creditors have been paid in full, together with statutory interest.