Crackdown on Directors Who Dissolve Companies to Evade Debts
New legislation has been enacted to make it easier to investigate and prosecute directors who dissolve their companies and avoid paying liabilities to staff, creditors and the taxpayer.
The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act will also help tackle directors dissolving companies to avoid repaying Government backed loans put in place to support businesses during the Coronavirus pandemic.
The new legislation extends the Insolvency Service’s powers to investigate and disqualify company directors who abuse the company dissolution process. Directors can face sanctions including being disqualified as a company director for up to 15 years or, in the most serious of cases, prosecution.
As such, companies with outstanding BBL or CBIL debt which are no longer viable will be unable to use the dissolution process to close a company and will have to follow the liquidation route.
For advice and support in dissolving a company, contact Michael Drumm or Shauna McStravick.
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