Over the last 6 months, the Debt Recovery team has seen an increase in their monitoring of debtor companies and notification for proposals for striking off action. The team are actively reviewing and objecting to any such proposals with Companies House to allow their clients to continue to chase their debts.
However, there may be cases where a company has been dissolved by its directors before debt recovery action has been commenced. Our recommendation is to ensure that your internal finance team keep a close eye on your aged debtor companies by regularly checking Companies House website https://find-and-update.company-information.service.gov.uk/ . If there is a proposal to strike off the company, you must immediately apply to object to a company being struck off and provide them with evidence of your outstanding debt. https://find-and-update.company-information.service.gov.uk/strike-off-objections
The Insolvency Service has been granted new powers to investigate and disqualify company directors who abuse the company dissolution process.
The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act received Royal Assent on 15 December 2021 and the legislation will cover England, Scotland, Wales and Northern Ireland.
The new legislation extends the Insolvency Service’s powers, on behalf of the Business Secretary, to tackle unfit directors who dissolve companies to avoid paying their liabilities, including repaying Government backed loans put in place to support businesses during the Coronavirus pandemic.
The Act will also mean the Business Secretary is able to apply to the court for an order to require a former director of a dissolved company, who has been disqualified, to pay compensation to creditors who have lost out due to their fraudulent behaviour.
The new powers have been welcomed across the industry. The legislation will provide much needed powers to the Insolvency Service to help hold rogue directors to account by providing additional deterrents and easier enforcement of the rules.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.
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If you need any assistance with applying to object to a debtor company from being struck off or, any would like to know more about the Insolvency Service’s new powers, please feel free to contact Donna Goddard, Head of Debt Recovery, e. [email protected] or, 0118 9527204.
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