No, they haven’t.
Many company directors tell us that they are not able to supply us with their Books and Records because someone has stolen them.
No one steals Books and Records, and no one will believe this excuse – not the Insolvency Practitioner, nor the Courts.
Some directors, and the occasional Accountant, do not appreciate the importance of a company’s Books and Records in a business insolvency situation.
The fact of the matter is that directors are being disqualified for not fulfilling their legal duties in relation to their company’s Books and Records.
So 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 Liquidator it is our legal responsibility (as per The Companies Act 2006) to notify The Department for Business, Innovation & Skills (BIS) if a company’s Books & Records are not appropriately supplied.
From BIS’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.
Anyone guilty of an offence is liable:
a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both)
b) on summary conviction, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both).
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.