Guidance

Reporting misconduct by companies, directors and bankrupts to the Insolvency Service

Updated 16 December 2021

1. Overview

The Insolvency Service has powers given to it by law to consider complaints about:

• people who are bankrupt or have a debt relief order
• individuals subject to bankruptcy or debt relief restrictions
• live companies where we’ve received reports of serious corporate abuse such as significant misconduct, fraud, scams or sharp practice in the way the company operates
• the conduct of directors of companies that have entered into formal insolvency proceedings (administration, administrative receivership, creditors’ voluntary and compulsory liquidation), or that have been dissolved
• a disqualified director or bankrupt or somebody who has a debt relief order acting as a company director whilst disqualified or otherwise breaching their restrictions
• the reuse of prohibited company names

Anybody can report misconduct relating to the above to us. The Insolvency Service cannot investigate complaints that do not relate to these matters, for example, we cannot investigate a complaint about a sole trader who is not bankrupt.

Our powers are different depending on whether a company is live, in compulsory liquidation, in other formal insolvency proceedings or has been dissolved. Check the Companies House register if you don’t know the status of the company that you want to complain about.

We will assess any information reported to us and consider whether to carry out further investigations.

We may take further action against the bankrupt, director or company if we find things that concern us during our investigations.

We can only investigate complaints that we have the legal powers to deal with and may suggest you contact another public body or pass your concerns on ourselves if this is appropriate. Please make it clear in your complaint if you don’t want us to do this.

If our enquiries show that a criminal offence may have been committed, we may send a report to the appropriate prosecuting authority (such as the police or our Criminal Investigations Team). That authority will then decide whether to carry out a criminal investigation, and criminal proceedings may begin. You may be asked to give a formal statement before proceedings start.

If you wish to make an anonymous complaint, we may still be able to submit the matter to the relevant investigating authority. However, if you do not provide contact details, we cannot reply to you, or ask you for further information to support your complaint. Any authority may only be able to take further action if they have suitable evidence or an appropriate witness, or both.

2. Reporting someone who is bankrupt, has a debt relief order or is subject to bankruptcy or debt relief restrictions

Read the guidance on bankruptcy restrictions.

Read the guidance on debt relief restrictions.

Complain about a bankrupt or somebody subject to a debt relief order.

3. Reporting a live company

These are limited companies or limited liability partnerships that are currently trading or have ceased trading without going into formal insolvency.

3.1 What we can investigate

You can make a complaint to the Insolvency Service if you have reasonable grounds to suspect a live company of:

• causing significant harm to groups customers, suppliers
• breaking the law, like fraud, scams
• having a significant irregularity in its affairs
• some Companies Act breaches
• other serious misconduct

3.2 We cannot investigate

We only have these powers to investigate live companies, we cannot investigate:

• sole traders or partnerships, unless they have limited liability
• overseas companies that do not have a trading presence in England, Wales, Scotland or Northern Ireland
• dissolved companies

The Insolvency Service does not usually investigate live companies:

• that have ceased to trade
• where the sole complaint is that there is a ‘phoenix company’
• isolated instances of misconduct, there must be a deliberate pattern
• that are being investigated by somebody else such as the police or another regulator
• where the main misconduct is something that should be investigated by another regulator
• where the main issue is that the company owes you money (there are options if you’re owed money)
• internal disputes
• shareholder concerns (minority shareholders have rights under the Companies Act and should seek independent advice)
• where we don’t consider the misconduct to be serious enough

3.3 What happens when you complain about a live company

We will acknowledge your complaint in writing if you gave us your contact details.

We review the information you provide and decide whether it’s appropriate for us to carry out an investigation. We may ask you for further information and/or carry out our own background research to help us reach this decision. Should we not decide to take your complaint forward to the investigation stage, we will write and tell you.

If we investigate, we do not tell the company or directors who has made the complaint or give them any specific reasons why we’re investigating them at any stage during this process.

Any investigation we carry out may result in us:

• taking no action against the company or its directors if:
  • there is no significant cause for concern
  • the allegations cannot be evidenced to the extent required by the court
  • there is another reason why it would not be right to take proceedings
• handing over information to our Criminal Investigations Team or another authority who can prosecute the company or its directors
• handing over information to another regulatory body that has more appropriate powers to deal with the misconduct
• giving the company and its directors a warning and asking them to improve their conduct
• applying to the court to liquidate (wind up) the company
• applying to the court to disqualify one or more of the directors

Our live company investigations are confidential so we cannot tell you if we have decided to investigate or what we find if we do investigate although, where possible, we will tell you the outcome of our investigation.

We will also issue a press release when we have successfully taken any action against the company or its directors (for example liquidating the company or disqualifying a director).

Find out more about how we publicise our enforcement results.

Read the guidance about live company investigations.

Find out how to make a complaint online or you can call 0303 003 1744 to ask for a form (24 hour answerphone). Find out about call charges.

You can also complain in writing:

Compliance and Targeting
Investigations and Enforcement Services
Insolvency Service
3rd Floor Cannon House
18 Priory Queensway
Birmingham
B4 6FD

4. Reporting an insolvent company

A company may fail for many reasons other than misconduct by its directors.

Examples of misconduct you can report include, but are not limited to:

• continuing to trade when insolvent to the detriment of creditors
• deliberately depriving creditors of assets
• acting fraudulently
• not keeping or producing suitable accounting records
• not submitting tax returns or paying tax on time, or submitting false information in tax returns
• not ensuring the company is run properly
• not following other regulatory requirements

4.1 Companies in compulsory liquidation

• if the company you want to complain about has gone into compulsory liquidation in England or Wales, contact the official receiver responsible for the case. They will review any information provided and decide whether to investigate further. If any evidence of misconduct is found they can apply for the disqualification of one or more of the company’s directors and/ or they may pass information obtained to another prosecuting or regulatory body that has more appropriate powers to deal with any concerns.
• if the company is in compulsory liquidation in Scotland contact the insolvency practitioner responsible for the case.

Check the Companies House register if you do not know the name of the official receiver or the insolvency practitioner.

4.2 Companies in administration, administrative receivership or voluntary liquidation

If the company is in, administration, administrative receivership or voluntary liquidation, contact the insolvency practitioner responsible for the case.

Check the Companies House register if you do not know the name of the insolvency practitioner.

The insolvency practitioner will inform the Insolvency Service if they think it is right to do so. The Insolvency Service will decide whether to investigate with a view to disqualification or pass information obtained to another prosecuting or regulatory body that has more appropriate powers to deal with any concerns. Read the guidance about insolvent company investigations.

5. Reporting a dissolved company

A company can be dissolved for many reasons other than misconduct by its directors.

We may investigate possible unfit conduct by a director of a dissolved company where information suggests that:

• corporate abuse has occurred. This is usually where the company has been involved in very serious misconduct, fraud, scams or other unethical behaviour
• a director did not make sure the company met all its statutory obligations, leaving it with unpaid fines or other enforcement action. For example, there might be outstanding fines for breaches of health and safety, immigration or environmental regulations
• a director has improperly carried on the same business or traded through a series of companies where each becomes insolvent (cannot pay their debts). Each time this happens, the insolvent company’s business and assets, but not its debts, are transferred to a new, similar ‘phoenix’ company. Depending upon the circumstances, this might show a director is unfit
• a director has repeatedly traded with the benefits of limited liability without following the rules relating to limited liability companies. For example, the director has a long history of serious filing defaults
• a director has not complied with the rules when applying to strike off a company from the register of companies

The public should report any breaches of the rules regarding filing documents at Companies House or striking off a company to Companies House and not to the Insolvency Service.

We cannot use these powers to investigate misconduct in dissolved:

• limited liability partnerships
• general partnerships
• building societies
• incorporated friendly societies
• NHS foundation trusts
• registered societies
• charitable incorporated organisations
• further education bodies
• protected cell companies

Read the guidance about dissolved company investigations.

Find out how to make a complaint online or you can call 0303 003 1744 to ask for a form (24 hour answerphone). Find out about call charges.

You can also complain in writing:

Compliance and Targeting
Investigations and Enforcement Services
Insolvency Service
3rd Floor Cannon House
18 Priory Queensway
Birmingham
B4 6FD

6. Reporting a disqualified director

As well as people who have been disqualified from acting as company directors, anyone who is currently bankrupt is automatically disqualified from being a company director without the court’s permission. They’re also disqualified if they’re currently subject to a:

• debt relief order
• bankruptcy restrictions order or undertaking
• debt relief restrictions order or undertaking

Find out more about director disqualification, who can be disqualified and what a disqualified director can and cannot do.

Check the Companies House register to see if a director is disqualified and if they have obtained the court’s permission to act as a director of a specified company.

Search the Individual Insolvency Register to find out if somebody is currently bankrupt, has a debt relief order or is subject to restrictions.

You can use our online form to report a disqualified director who is:

• working as a director of a company or a member of a limited liability partnership (LLP) - unless they have the court’s permission
• involved in the promotion, formation or management of a company - unless they have the court’s permission
• acting as an insolvency practitioner
• breaching any other restrictions relating to the disqualification

You can also call 0303 003 1744 to ask for a form (24 hour answerphone). Find out about call charges

You can complain in writing:

Compliance and Targeting
Investigations and Enforcement Services
Insolvency Service
3rd Floor Cannon House
18 Priory Queensway
Birmingham
B4 6FD

6.1 What happens when you complain

We will acknowledge and consider your complaint and, if appropriate, forward it to our Criminal Investigations Team (this is an independent team within the Insolvency Service) to consider whether a criminal offence has been committed.

7. Reporting the reuse of a company name

A director of a company that has gone into insolvent liquidation (but not into administration or administrative receivership) is banned for 5 years from forming, managing or promoting any business with the same or similar name to the liquidated company. Breaking this law may be a criminal offence, and the director may be personally liable for any company debts incurred whilst a name is banned. A banned name includes:

• the registered name at Companies House
• any name the company was known by in the 12 months before liquidation such as a trading name
• any similar name that suggests an association with the liquidated company

This restriction applies to both registered directors and people who have acted as a director.

7.1 Exceptions

There are three exceptions where the above restrictions do not apply.

7.2 The company is sold by the liquidator or administrator

The name of the insolvent company may be reused if that company’s business is sold by a licensed insolvency practitioner and the former director gives legal notice that they intend to act in relation to the new business or company using that name within 28 days of completion.

7.3 The director asks the court for permission

The director can ask the court for permission to use the company name, or similar, within 7 days of the liquidation. This allows them to use the name for:

• up to 6 weeks from the date of the liquidation, or
• up to the point where the court decides whether to give them permission

If the court hasn’t made its decision within 6 weeks, the restriction will again apply to them. If the director applies after 7 days then they must obtain the court’s permission before they start to use the name.

7.4 The name is already in use

The director can be involved with another company (but not business) which has used the same or similar name as the liquidated company for the 12 months before the date of liquidation. They do not require permission of the court to keep using the name in connection with that existing company provided that company has:

• used the name continuously for the 12 months before the liquidation
• traded for the whole of the 12 months before the liquidation

Find out more about the re-use of company names.

If you believe a director is wrongfully reusing a company name you can use the online complaints form or you can call 0303 003 1744 to ask for a form (24 hour answerphone). Find out about call charges.

You can also complain in writing:

Compliance and Targeting
Investigations and Enforcement Services
Insolvency Service
3rd Floor Cannon House
18 Priory Queensway
Birmingham
B4 6FD

7.5 What happens when you complain

We will acknowledge and consider your complaint. Where appropriate we will remind the director of the rules and ask that they correct the situation. We may forward the complaint to our Legal Services Directorate to consider whether, under the Code for Crown Prosecutors, a criminal prosecution should be started.