For all corporate insolvencies starting on or after 6 April 2016 insolvency office-holders are now required to submit a report on the conduct of anyone who was a director of the insolvent company in the 3 years leading up to the insolvency, irrespective of their conduct. Currently, reports are only required where office-holders consider a director’s conduct makes them unfit to be involved in a company’s management in the future.
Reports relating to insolvencies starting on or after 6 April 2016 must be submitted within three months of the date when the insolvency starts. The current position is that for insolvencies starting before 6 April 2016 reports must be submitted within six months.
Failure to comply carries criminal sanctions, so it is important that office-holders are aware of the requirements set out in the new section 7A of the Company Directors Disqualification Act 1986 (CDDA 1986).
Insolvency is defined as an insolvent liquidation, administration or where an administrative receiver has been appointed.
Rules have also been made providing for submission of reports by office-holders electronically via the Insolvency Service portal and these will also come into effect on 6 April 2016.