Companies: Debts Written Off
The question
To ask the Secretary of State for Business and Trade, if he will make an assessment of the potential impact of regulations allowing people whose companies’ debts are written off to retain personal wealth on public confidence in (a) fraud investigation and (b) public bodies.
Answered by Blair McDougall
There are no plans for any such assessment.
Companies are separate legal entities from their directors; those directors only become liable for company debts in limited circumstances. This protection encourages entrepreneurship and is central to the health of the UK economy.
Most companies become insolvent for genuine reasons, however insolvency office-holders have wide powers to recover funds from directors who have not acted in the company’s best interests. The Insolvency Service may also take disqualification action against reckless or dishonest directors and can apply for a compensation order against them, as well as prosecute breaches of company and insolvency legislation.
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