New powers to give greater protection to staff and small suppliers in insolvent businesses
22 March 2018: The government has launched a consultation to improve the UK’s corporate governance framework and ensure the highest standards of behaviour in those who lead and control companies in, or approaching, insolvency. There will be a significant focus on the following areas:-
- Directors selling companies recklessly to face tough new sanctions including fines and disqualification
- Creditors could have money returned to them by reversing inappropriate asset stripping
- Directors dissolving companies to dodge debts and avoid facing accusations of misconduct to face investigation for the first time
- Strengthening corporate responsibility will enhance the UK’s business environment and ensure it remains one of the best places to start and grow a business
- Seek views on new ways to protect payments to smaller firms in a supply chain which can be hit hardest when large companies become insolvent
The vast majority of UK companies are run fairly and responsibly but a small number of recent corporate governance failures have raised concerns that company directors can unfairly shield themselves from the effects of insolvency and – in the worst cases – profit from business failures while workers and small suppliers lose out.
These reforms seek to respond in a balanced and proportionate way to help reinforce public trust and confidence in businesses and further strengthen the UK’s business environment which is a key part of the UK’s Industrial Strategy, the government’s long-term plan to build a Britain fit for the future. They will also help to ensure the UK remains one of the best places to start and grow a business and is an attractive place to invest.
If you are a director of a company that has concerns over its responsibilities when insolvency looms then BRI Business Recovery and Insolvency can provide advice and guidance to steer you through the maze of insolvency legislation so that considered and informed decisions are taken correctly with minimal risk of personal liability ensuing for those actions.
To discuss your position please call or e-mail any one of our licenced insolvency practitioners at our offices in Northampton, Banbury, Coventry, Hitchin, Milton Keynes, Southampton or Spalding and speak to us today – contact us. All of our initial client meetings are free of charge, in confidence and without obligation.