Ministers are working on proposals to disqualify or fine bosses who attempt to walk away from businesses to avoid payroll and pension liabilities.
Under new plans drawn by up the Department of Business, Energy and Industrial Strategy, directors will face investigation if they try to escape paying a dissolved company’s debts to staff and creditors.
The government will also introduce new measures to enable companies in financial distress to continue to trade through the restructuring process and give viable companies more time to seek investment to rescue the business. The plans are being put forward in response to the corporate governance and insolvency consultation, which launched in March this year.
Business minister Kelly Tolhurst said: “The UK is a great place to do business with some of the highest standards of corporate governance. While the vast majority of UK companies are run responsibly, some recent large-scale business failures have shown that a minority of directors are recklessly profiting from dissolved companies. This can’t continue.
“That is why we are upgrading our corporate governance to give new powers to authorities to investigate and hold responsible directors who attempt to shy away from their responsibilities, help protect workers and small suppliers and ensure the UK remains a great place to work, invest and do business.”