This Commons briefing paper provides a brief overview of directors' duties and potential liabilities in relation to companies in financial difficulty. In particular, it looks at liability for wrongful and fraudulent trading and under the directors disqualification regime.
Company insolvency: potential liabilities of directors (2 MB , PDF)
Directors manage the day-to-day management of a company; decisions are taken collectively by the board of directors. In practice, decisions are either taken by a majority vote at board meetings or by all directors signing a written resolution. The director’s role and his powers are defined in the company’s Articles of Association and, if he is also an employee, in his employment contract.
Certain key duties of directors are contained in the Companies Act 2006. Directors are also subject to a number of other statutory requirements and restrictions, for example, a duty to keep proper books and restrictions on accepting loans from the company. Directors owe a duty to the company and, if there is a risk of insolvency, to creditors. It is important to note that whilst certain provisions of the the Insolvency Act 1986 only apply when a company has gone into liquidation, they may relate to the conduct of the directors before the liquidation.
This Commons briefing paper provides a brief overview of directors’ duties and potential liabilities in relation to companies in financial difficulty. In particular, it looks at liability for wrongful and fraudulent trading and under the directors disqualification regime. The information contained in this briefing paper, and corporate insolvency legislation generally, applies to England and Wales, and Scotland.
Company insolvency: potential liabilities of directors (2 MB , PDF)
A note on the main measures and impact of the Corporate Insolvency and Governance Act 2020. The Act introduced permanent measures to update the UK insolvency regime, and temporary measures to help businesses during the pandemic.
The Government recently presented the Subsidy Control Bill, which creates a new UK legal framework for public authorities that provide subsidies to businesses. This briefing summarises the Bill, its background and commentary.
This paper collates data on the number of applications and total support provided under the UK Government coronavirus business support schemes. The attached excel spreadsheet allows users to view data by Parliamentary constituency and local authority.
