Insolvency Disqualification Statistics
The Insolvency Service has disqualified 573 directors for more than five years during 2016/17, the highest figure since 2010/11 and up 8% on 532 disqualifications in 2015/16.
The increasing number of these bans is due to the Insolvency Service taking tougher enforcement action on issues such as:
• repaying friends and family ahead of other creditors – usually HMRC;
• directors closing down today and opening up tomorrow under a new name – otherwise known as “phoenixing” and transferring assets to a new company to avoid repaying creditors;
• using company money for personal benefit; and
• keeping a company trading when directors know they are unable to pay debts.
Where The Insolvency Service can prove directors have broken the rules and left creditors out of pocket directors are much less likely to get away with wrongdoing.
Director disqualifications can be up to 15 years for the most serious cases and prevent an individual from being involved in the formation or management of a company.