More dodgy company directors put out of business
Company directors are being warned to double-check that they are doing their duties after figures showed a 25% increase in disqualifications against them in the past year.
The warning from Pinsent Masons was issued after the legal firm obtained data showing director disqualifications hit 1,208 in 2013-14, up from 969 in 2012-13.
“In any event,” he reflected, “it is certainly a warning for directors to act in accordance with their fiduciary duties and behave responsibly to creditors.”
In line with more directors being investigated and disqualified, last year also saw a 19% rise in the stock of director disqualification proceedings issued in England, Wales & Scotland.
Disqualification proceedings are usually brought where a company has become insolvent and there is evidence that the director (or directors') conduct makes them unfit to be managing a company.
Misconduct can range from serious incompetence to recklessness and fraud, which can lead to bans of up to 15 years from directing a company and/or taking part in its promotion, formation and management.
Meanwhile, and in spite of the rise in the number of disqualifications and orders, business secretary Vince Cable is still calling for tougher laws to crackdown on dodgy directors.