Lincoln & Rowe advise company directors on their obligations and duties pursuant to the Companies Act 2006 and Insolvency Act 1986. The legislation places a number of statutory obligations on directors to act with reasonable care and skill, avoiding conflicts of interest, promoting the interest of the company and not making secret profits.
In these uncertain economic times, it is important that directors are aware of their duties and ensure they do not fall foul of them as if their company becomes insolvent, directors could be exposed to disqualification proceedings by the Insolvency Service in circumstances where their conduct is considered unfit. Such conduct can include:
- Continuing to trade when the company is unable to pay its debts as and when they fall due
- Not paying tax owed by the company
- Failing to keep proper company accounting records
- Failing to send the company’s accounts and returns to Companies House
- Misfeasance through using the company’s money and/or assets for personal benefit
- Trading with the intent to defraud creditors
A director can be disqualified for up to 15 years and in cases involving fraud, directors can face criminal prosecution including imprisonment.
Lincoln & Rowe have extensive experience in advising directors on their duties, challenging disqualification proceedings and where disqualification is inevitable, mitigating disqualification proceedings by negotiating undertakings.