MORE DIRECTOR DISQUALIFICATION IS THE POTENTIAL OUTCOME OF AN INCREASE IN DIRECTOR DISQUALIFICATION PROCEEDINGS.
In an informative blog on 1st December 2014 by Mike Finch at accountants Moore Stephens, Mr Finch discussed that 30% of directors were reported to the Insolvency Service for investigation after corporate insolvency, for potential misconduct. That equates to Insolvency Practitioners making reports in 4,671 of 15,412 corporate insolvencies, in the period under scrutiny, with the potential outcome being director disqualification.
THE REPORTING PROCESS FOR POTENTIAL WRONG DOING OF DIRECTORS
When a director instructs an Insolvency Practitioner to place a company into liquidation or administration, at or around six months after the date of his/her appointment, the Insolvency Practitioner is obliged to file a conduct report with the Insolvency Service reporting any (mis)conduct/potential wrong doing of all the directors in the company under investigation.
DIRECTOR DISQUALIFICATION PROCEEDINGS INCREASED IN 2014
In the year to 30 March 2014, in 27% of the 4,671 cases referred to it, the Insolvency Service commenced Director Disqualification Proceedings. A much higher number of cases may have been investigated by the Insolvency Service before a decision was made not to proceed to the commencement of disqualification proceedings. That is an increase from 19% in the year 2012/2013.
WHAT SHOULD THEDIRECTOR DO IF DIRECTOR DISQUALIFICATION PROCEEDINGS ARE COMMENCED?
Neil Davies & Partners has the strength, breadth and depth of experience to advise upon and respond toDirectorDisqualification Proceedings for a director. For example, the Directors’ Questionnaire that the director receives from the Insolvency Practitioner can also be used by the Liquidator to base an adverse report to the Insolvency service. If you are facing director disqualification proceedings, we can advise you on how to complete this questionnaire in the right way in order to minimise and mitigate your exposure. This may result in you being better placed to avoid becoming part of the increasing percentage of reported directors, or even ultimately avoiding being disqualified as a director and all the potential damage that can do to finances and reputation.
If YOU ARE FACING POSSIBLE DIRECTOR DISQUALIFICATION PROCEEDINGS, ACT QUICKLY
It is absolutely imperative that the right advice is sought early. If you believe that you are facing possible director disqualification, you should contact us straight away for a free initial discussion. The earlier you get in touch, the more we can help.I