Can Directors Be Investigated After Forced Liquidation?

Directors can be investigated after a company is forced into liquidation. In a compulsory liquidation, the Official Receiver examines the company’s affairs, the reasons for its failure, and the conduct of its directors. A director conduct report is submitted to the Insolvency Service, which may decide that further investigation is appropriate. Areas of concern can include misuse of company funds, poor record keeping, transactions that disadvantage creditors, or irresponsible trading. An investigation does not automatically mean wrongdoing occurred, but serious misconduct can result in director disqualification, compensation proceedings, or, in more serious circumstances, criminal action.

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