Director information hub: Disqualification - The insolvent investigation process
Understanding the process when the Insolvency Service investigates your conduct as director of an insolvent company.
Why am I being investigated?
Within three months of a company entering formal insolvency proceedings, the office-holder (for example, an administrator or liquidator) must submit a director conduct report to the Insolvency Service, acting on behalf of the Secretary of State for Business and Trade. Based on this report, the Insolvency Service decides whether it is in the public interest to investigate further.
It is important that you co-operate with the office-holder and provide them with
up-to-date contact details.
What happens next?
If an investigation is commenced, you will receive a letter from the Insolvency Service. It will ask for comments on the initial areas of investigation.
It is in your best interests to respond. If you do not, the Insolvency Service can only rely on information available from other sources, when making their decision. Any evidence and explanations you provide will be important when making this decision.
The Insolvency Service may contact you again as the case progresses, to ask you further questions. You can also provide the Insolvency Service with more information at any stage of the process.
Investigation outcomes
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If no further action is required, the case will be closed, and you will be informed.
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If the investigation recommends disqualification, you will receive a summary of the alleged misconduct and next steps to take. You will again be invited to provide any further information you think should be considered.
Secretary of State decision
If a disqualification recommendation remains appropriate, this will be reviewed by an independent team within the Insolvency Service acting for the Secretary of State.
They will decide if there is sufficient evidence and whether it is in the public interest to commence disqualification proceedings.
Before proceedings are commenced, you will receive a detailed letter from the Insolvency Services’ Legal Services Directorate outlining:
- the full allegation
- the potential disqualification period (2 to 15 years)
- if a compensation order is being sought
- the available evidence and how to request copies
- your available options
You can find further information about the insolvent company investigations process and director disqualification.