Trying to Dissolve Your Company With a Bounce Back Loan (BBL)?

On 15th February 2022, provisions under The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill came into force. The legislation allows for the scrutiny of Directors of dissolved limited companies. It gives the Insolvency Service powers to investigate the conduct of director(s) of dissolved limited companies up to 3 years after dissolution. It was initially introduced as a response to widespread misuse of the Bounce Back Loan Scheme and, will see directors who took these loans more closely scrutinised.

It means if you dissolve a company:

• The directors will face scrutiny and if found to have acted inappropriately could ultimately face disqualification.
• Directors could face corporate orders
• The Insolvency Service are investigating fraudulent Bounce Back Loans that were taken when the company was dissolved or newly incorporated

Director(s) can dissolve a company without going through insolvency proceedings. However, the Insolvency Service will be able to investigate the Director of the dissolved company.

If the Insolvency Service find director(s) to be ‘unfit’ to be involved in the management of a company, they can apply to the Court for a Disqualification Order.

They can seek a ‘Director Disqualification Compensation Order’ where a former Director of a dissolved company has caused loss to creditors.

“Am I Personally Liable for my Bounce Back Loan?”

The Insolvency Service can remove the Corporate Veil (i.e. the protection offered by a Limited Company). This can result in Directors being made personally liable in extreme cases (Particularly involving misuse of Bounce Back Loans). Businesses now face up to the changes and challenges that 2022 will likely present. As a result, we will see an increase in companies facing cash flow issues and in some cases, inevitable Insolvency.

Our Team, of professionals from Legal, Accountancy, Financial Services and Insolvency backgrounds can provide guidance that covers all bases. Your interests and protection are always at the forefront of everything we do. Our Specialists can review all options available to you and provide guidance on how best to manage creditors. We can do this while you continue to trade or protect your personal position as a Director in the event of ceasing to trade.

If you would like to discuss your situation with a member of our Team, send us an email at [email protected] or call us on 0333 305 4331.