Sophia Purkis & Judith Davidge examine proposals to hold unscrupulous directors to account: do they go far enough?
- The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill intends to address the disparity which allows former directors of dissolved companies to escape investigation into their conduct.
- The Bill is a step in the right direction, but it may not go far enough to deal with the actions of delinquent directors, and will not make much difference without more dedicated resources for the Insolvency Service.
The ability to dissolve companies without any formal insolvency process has long been used by the less than scrupulous to hide inappropriate behaviour. As the pandemic (hopefully) draws to an end, the government is seeking to take pre-emptive measures to tackle possible fraud arising from loans made to support companies during the pandemic and to deal with this issue.
The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill was introduced in the House of Commons on 12 May 2021.
Policymakers say the Insolvency Service frequently receives complaints about the conduct of former directors
