Insolvency Service given new powers to tackle unfit directors of dissolved companies
In an extension to the existing powers of the Insolvency Service to investigate the conduct of the directors of live companies (in the public interest) and companies which enter a form of insolvency, the Government has recently indicated that those investigatory powers will also be exercisable in relation to dissolved companies without the need for them to first be restored to the register and placed into liquidation.
The primary aim of these new measures is to seek to discourage directors from abuse of the dissolution process in an effort to avoid scrutiny of their conduct (and potential disqualification from acting as a director) and in particular as a means to avoid liability for repayment of Government-backed loans procured during the pandemic. In that regard it is notable that it is proposed that the new powers, included in the Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill, are to have retrospective effect. To read the Government press release in full click here.
If you are affected by directors disqualification, or have concerns about the conduct of directors in any particular case and would like to know more, please contact dedicated insolvency specialists, John Bradshaw and Sarah Mower in our Insolvency & Business Recovery Team.
Sarah Mower specialises in business insolvency and restructuring within the Business Services department at Barker Gotelee Solicitors in Suffolk.