The insolvency Service has had its powers extended on behalf of the Business Secretary to help tackle directors who dissolve companies to avoid paying their liabilities from Government-backed loans they took during the Covid-19.
Previously the Insolvency service had powers to investigate directors who enter insolvency, administration, and liquidation. They could also investigate companies that were actively trading for any wrongdoing.
As of 15/12/2021, together with the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) act, the Dissolution service will be able to take action against directions of a dissolved company that has taken a government-backed loan that was put in place to support businesses during covid, and dissolved the company to avoid paying back what’s owed.
Directors can face disqualification for up to 15 years and even pay compensation to creditors who have lost out due to the directors fraudulent behaviour. In the most serious cases can face prosecution. This new legislation will apply to England, Scotland, and Wales.
You can find more information on the government’s website here.