Law given green light to investigate directors of dissolved companies awarded Covid loans

The new law means that the Insolvency Service now has the power to investigate the directors of dissolved limited companies up to three years after they were dissolved.

It is estimated that more than £28bn was paid out in Covid Loans, before the UK government introduced basic anti-fraud measures and it is estimated that almost £5bn of these loans were fraudulent.

Even though the majority of the loans,  including Bounce Back Loans (BBLs), will not have been taken out fraudulently, for many the measures came too late and were not enough to save struggling companies.

The new legislation means that any company with an outstanding BBL, can no longer be dissolved without first facing the possible scrutiny of an investigation by the Insolvency Service. And the service will now have the power to investigate the conduct of a Director of a company that was dissolved, making them personally liable and particularly in relation to BBLs.

If the investigations into a director finds that their conduct makes them 'unfit' to manage a company, then the Insolvency Service can apply to a court for a Disqualification Order.

How can Giltinan and Kennedy help?

In the business community, we know that Covid-19 disruption is not over and for any business facing financial difficulties, the sooner directors take professional advice, the more options they may find available to them.

We work in partnership with you, whether your issue relates to a Covid loan or another part of your business, before recommending the best course of action to take.

Our clients include many businesses, charities and individuals across Horsham, West Sussex and beyond. Please feel free to get in contact with us for an informal chat about your business finances on 01403 337490 or learn more at https://www.giltinan-kennedy.co.uk/services/tax-advisers