Cable outlines greater sanctions for ‘dodgy directors’ following company insolvency

Published on April 25, 2014 by Crawfords Accounting

Entering into company insolvency could have more extreme implications for directors in the years to come, following the publication of proposals by business secretary Vince Cable.

In a newly published package, Mr Cable outlines ways to strengthen the regime surrounding director misconduct, and to improve transparency of UK corporate ownership structures.

Among the proposals is a move to increase the time limit during which proceedings may be instigated under section 6 of the CDDA (Company Directors Disqualification Act 1986).

This currently stands at two years from the first company insolvency event which occurs, although Mr Cable would have the deadline increased to three years.

“To ensure actions which provide redress are indeed brought forward and that they work effectively in the interests of the creditor, we will allow causes of action that arise on an insolvency to be sold or assigned to another party to pursue,” the proposals add.

In general, the moves aim to “increase trust in companies where the rules are broken”, and could make it even more important for directors to act appropriately during corporate insolvency proceedings in the years ahead.

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