Latest Solicitors News - July 2009

More company directors disqualified than ever before

Record numbers of company bosses have been banned from acting as directors during the last financial year.

Figures from the Insolvency Service show that during 2008-9 a total of 1,252 were disqualified. The average length of disqualification has also risen 12 per cent to 6.5 years.

Company bosses can be barred for various misconduct faults, including fraud or theft in the run up to a business collapse, but a ban can also come into force if bosses fail to keep a correct accounting record or to file accounts on time.

Disqualified directors can also be jailed for up to two years if they do not pay the Business, Enterprise and Regulatory Reform (BERR) for the costs incurred in bringing disqualification proceedings.

It follows new penalties, introduced in February, which mean businesses face much higher penalties for late filing of accounts.

Individuals who have been disqualified can still go into business, but only as a sole trader, giving them unlimited liability for the losses of that business.