It has always been the case that the Insolvency Service is only able to investigate Directors of current companies or companies which have entered formal insolvency.

At present, the Insolvency Service is unable to investigate directors of companies that have been dissolved and the Companies Directors Disqualification Act 1986 does not grant powers to deal with such directors.

Accordingly, in such cases, a cumbersome process, involving the reinstatement of the company under investigation, has to be pursued which is time consuming and costly.

With the intent to rectify the position, the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (‘the Bill’), which is currently passing through Parliament, will provide the Insolvency Service with power to investigate directors of dissolved companies. Additionally, a court will also be able to order compensation to be paid by a disqualified director whose conduct has resulted in loss to creditors.

Tim Thompson of Kangs Solicitors briefly comments upon the Bill.

The Team at Kangs Solicitors is nationally recognised for its work assisting clients facing allegations of criminal activity of every nature, including those involving breaches of company law, Director Disqualification, Insolvency and Bankruptcy.

Our team is led by Hamraj Kang who is recognised as a leading expert in the field of white collar investigations. He is one of only two solicitors nationally to be ranked as a ‘star individual’ for six consecutive years in the legal directory Chambers & Partners.

We are here to assist you and our team can be contacted for confidential and discrete advice as follows:

Progress of The Bill through Parliament | Kangs Insolvency Solicitors

  • The Bill has now been approved by the House of Commons and is scheduled for its Third Reading in the House of Lords in December 2021.
  • In due course, any amendments will be considered and either adopted or rejected prior to anticipated Royal Assent early in 2022.

Principal Aims of The Bill | Kangs Company Offences Defence Solicitors

  • The current system is inadequate because it can be shown to have been manipulated by directors in order, inter alia, to ‘bury’ trading misconduct and avoid debt, including payments due to HMRC without prompt and effective legal sanction.
  • As we previously explained in an article posted to this website entitled HMRC & Phoenix Companies, it frequently occurs that directors, having dissolved one debt ridden company, immediately commence trading in the same field of operation, simply by adopting a new trading name.
  • Also, as previously set out in our article posted to this website entitled Fraudulent ‘Bounce Back’ Loans & Director Disqualification‘ there exists serious concern that company dissolution will be used as a means to avoid repayment of ‘Bounce Back Loans’ received from the Government.
  • The extension of the powers of investigation for the Insolvency Service will include sanctions such as Director Disqualification Orders.

Government Comment | Kangs Insolvency Service Defence Solicitors

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.’

How Can We Help? | Kangs Insolvency Offence Defence Solicitors

Anyone who is, or anticipates becoming, subject of an Investigation or court proceedings of any nature conducted or issued by any authority, including the Insolvency Service, should seek immediate expert legal guidance and advice.       

It is to be anticipated that when the Bill becomes law, the level of investigations being conducted by the Insolvency Service, particularly into the manner in which ‘Bounce Back’ loans have been used, will substantially increase.

Who Should I Contact? | Kangs Bounce Back Loan Tax Solicitors

We welcome enquiries by telephone or email.

We provide an initial no obligation consultation from our offices in London, Birmingham and Manchester.

Alternatively, we provide initial consultations by telephone or video conferencing.


Hamraj Kang
07976 258171 | 020 7936 6396 | 0121 449 9888

Tim Thompson
0161 817 5020 | 020 7936 6396 

John Veale
0121 449 9888 | 020 7936 6396 | 07989 521 210