New powers to tackle unfit directors of dissolved companies

On 12th May 2021, the Government announced new powers will be given to insolvency services to allow them to investigate directors personally after a company has been dissolved.

The legislation will aim to stop directors of companies taking advantage of the dissolution process, to avoid repayment of Government backed loans.

If there are findings of misconduct or wrongdoing, directors could face disqualification for acting as a company director for up to 15 years and this would also prohibit them setting up nearly identical companies, in the future.

Business Secretary Kwasi Kwarteng said: “As we build back better from the pandemic, we need to restore business confidence, but also people’s confidence in business – which is why we will not hesitate to disqualify directors who deliberately leave employees and the British taxpayer out of pocket.

“We are determined that the UK should be the best place in the world to do business. Extending powers to investigate directors of dissolved companies means those who have previously been able to avoid their responsibilities will be held to account.”

Preventive measures against the misuse of the dissolution process, with tougher consequences, will help strengthen the public’s perception of companies.

If you require any advice in relation to dissolution process or insolvency, please contact our Corporate team, who would be happy to assist with any enquiries and advice.


This article is prepared with the intention of providing general information on the changes in law. Philip Ross Solicitors accept no responsibility for errors it may contain and the coverage of the topic is not comprehensive. You are advised to speak directly to the writer or another partner within this firm within any specific enquiries on the topic addressed.

Arthur is a solicitor specialising in corporate law. He has been practising law for over 30 years and has practiced abroad. He is also a notary public. He specialises in mergers and acquisitions, banking law, corporate finance including private equity, AIM listings, corporate restructuring and corporate insolvency.