Client Portal
31 August 2016

A director of a restaurant has been hit with an 8 year ban for failing to have adequate books and records.

The disqualification means the director cannot be involved (directly or indirectly) in the promotion, formation or management of a company for the length of the order.

The company had been placed into compulsory liquidation after a winding up petition by HMRC. The appointed liquidator then conducted the required investigation and found the Books and Records to be inadequate.

The Head of Company Investigation at the Insolvency Service said:

“Directors who operate cash based businesses have to maintain sufficient records to explain where these monies have gone and following insolvency make sure that such records are delivered up for scrutiny by the relevant bodies.”

Books and records are important for directors and their Accountants

Some directors, and the occasional Accountant, do not appreciate the importance of a company’s Books and Records in a business insolvency situation.

It is worth highlighting this aspect of the Liquidation process in order to avoid unnecessary punishment – especially as, in many cases, it is the Accountant who holds the Books and Records on behalf of their client.

Supplying the Books and Records of a liquidated business is often seen as trivial, especially given everything else that is going on at that time. However, as a Liquidator it is our legal responsibility to notify the Department for Business, Energy and Industrial Strategy (BEIS)* if a company’s Books & Records are not appropriately supplied.

{* BEIS is the newly created department following the merge of the Department for Business, Innovation & Skills and the Department of Energy and Climate Change.}

From BEIS’s point of view, it is a relatively simple thing for them to chase up – far easier than investigating the conduct of directors, which uses up far more resources and could ultimately end up costing them a lot of time and money for limited returns.

How Accountants can help

Accountants can help their clients by encouraging them to submit their Books and Records in the correct manner and timescales.

If they do hold Books and Records on behalf of their clients, they may find themselves getting embroiled into the situation.

Get in touch to see how we can help

  • This field is for validation purposes and should be left unchanged.

If you are worried about your business or just want a (free) no obligation chat, contact Clarke Bell on 0161 907 4044 or [email protected] today. Our Licensed Insolvency Practitioners will provide you with the best professional advice for your situation.

For your free expert advice 0161 907 4044

Or just enter your details below

Contact Us

  • This field is for validation purposes and should be left unchanged.