Close Menu
No.1 in UK for Limited Company Liquidations
UK Liquidators

Insolvency Related News

Latest News from UK Liquidators

Low-Cost Liquidation
100% Confidential
Stop HMRC & Creditor Pressure
Partner-led Service

Government Promises Tough Action Against Directors ‘Recklessly Profiting’ From Company Dissolutions

By Jon Munnery
28 July 2020

The government has taken steps to strengthen the powers of the Insolvency Service when it comes to cases of improper conduct during company dissolutions.

While acknowledging that “the vast majority of UK companies are run responsibly”, the government’s Department for Business, Energy & Industrial Strategy has made clear its concerns about the “minority of directors who deliberately dodge debts by dissolving companies”.

As a result, the Insolvency Service will soon be able to issue fines and disqualify company directors who dissolve businesses with the aim of avoiding payments of debt owed to creditors or to employees.

Hopes are that the service and its investigators will be able to take quick action against directors who dissolve a company specifically in order to get rid of its debts before then moving on to create a very similar business a short time later.

A key aim of the government’s plans is to ensure that employees and suppliers of dissolved companies are less frequently left unpaid when businesses go bust.

As part of its package of new measures, the government has said that companies struggling financially will be given more time to formulate viable rescue and recovery plans so that jobs can be better safeguarded in the context of insolvency situations.

“Some recent large-scale business failures have shown that a minority of directors are recklessly profiting from dissolved companies,” business minister Kelly Tolhurst said in a statement. “This can’t continue.”

Further details on the government’s plans to improve standards of corporate governance and insolvency regulations are to be outlined in greater detail in the coming weeks and months.

The ideas sketched out so far have been welcomed by representatives of the insolvency industry, including by the UK’s main insolvency and restructuring trade body R3.

“R3 welcomes the government’s announcement that it is progressing its corporate insolvency proposals, which should help to ensure that the UK’s insolvency and restructuring framework retains its world-class status,” said Stuart Frith, president of R3.

“Our members have long raised concerns that some directors are deliberately dissolving businesses to avoid paying their debts.

“A strengthened disqualification regime will be an important part of ensuring that directors are less likely to walk away from their responsibilities.”

Jonathan Munnery
Partner
Is Liquidation the best option for you?

By completing the test, you will receive:

Your Liabilities & Assets
Types of Liquidation Available
Your Companies Health Risk
Alternatives to Consider
Related Articles
30/06/2016
Ambulance Service Subcontractor Heads into Liquidation
A provider of ambulance and patient transfer services in the county of Sussex in southern England has been forced into liquidation.
Read more
01/07/2016
Derby Fireplace Company Enters Voluntary Liquidation
The Derby Fireplace Company, whose name neatly outlines the nature of its business, has entered liquidation on a voluntary basis having struggled to achieve profitability over the course of recent months and quarters.
Read more
29/03/2016
Liquidated Healthcare Firm Backed by Cherie Blair Owes Creditors £5m
A healthcare company backed by the wife of former British prime minister Tony Blair owed creditors as much as £5 million when it went out of business in June 2015.
Read more
Ready to Liquidate?
Express Liquidation Service
Ready to start liquidating today? Complete the form and a member of our team will be in touch.
Please note: By completing this form you are not liquidating your company
Contact the UK Liquidators Team

If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.

  • Free initial consultation
  • Strictly confidential
  • Fully licensed insolvency practitioners
  • Local office support
  • Named case handler throughout

Looking for immediate support?

Complete the below to get in touch

 
 
 
 
 
100% Free & Confidential Advice