When a company enters into a formal insolvency procedure, it is the duty of the insolvency practitioner appointed to take custody of all the records pertaining to the company.
The insolvency practitioner will then inspect these records to help him establish whether there are any potential rights of action against the directors. The reveiw will also help to determine whether the director’s conduct is unfit.
Failure to keep and maintain proper books and records may lead to disqualification proceedings being issued against the directors by the Insolvency Service.
If a director is found to have kept sketchy accounting records which do not fully explain certain transactions, the Insolvency Service and the insolvency practitioner may reach the conclusion that such actions are used to cover up a multitude of sins!
Karon Crone, the director of Micrositez Digital which traded for just a year, was found to have paid large sums of money to her husband and an associated company but with no proper records of the transactions. Mrs Crone was investigated and was disqualified from acting as a director for seven years after giving an undertaking.
It is important for anybody facing financial difficulties, whether personally, directors of limited companies or partnerships, to seek advice from a licensed insolvency practitioner.
To take advantage of our free consultation, please telephone Stella Flemmings on 01377 257788, 01724 230060 or 01904 520116 and she will make you an appointment with one of our insolvency professionals at our Driffield, Scunthorpe of York offices.
Redman Nichols Butler has had a York office for over five years now and specialises in advising SME businesses in York and North Yorkshire. The Redman Nichols Butler York office address is Westminster Business Centre, Nether Poppleton, York, YO26 6RB. We regularly advise people and businesses in York, Wetherby, Ripon, Thirsk and Harrogate.