Think you can just dissolve your company? Think again
The dissolution process has, unfortunately, occasionally been misused. Sometimes directors try to get their company struck off quietly even though it is insolvent, in some cases hoping to avoid any scrutiny of what they might have done.
The Insolvency Service is now to be given powers to investigate directors of companies that have been dissolved, acting as a strong deterrent against the misuse of the dissolution process. Extension of the power to investigate also includes various sanctions such as disqualification from acting as a director.
The measures are included in the Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill and will be retrospective.
The government hopes that extending the disqualification regime in this way will also act as a deterrent against using the dissolution process as a method of fraudulently avoiding repayment of government backed loans given to businesses to support them during the Coronavirus pandemic.
The right thing to do, of course, is to get proper advice from a qualified Insolvency Practitioner before taking any action which might come back to bite you later.
Published June 2, 2021