Company directors “should not be held liable for post-sale problems” by facing sanctions related to business insolvencies if the problems which force a company into liquidation occur after it has been sold, The Institute of Directors (IoD) says.
Responding to a government consultation from the Department for Business, Energy & Industrial Strategy on how insolvencies are handled, the IoD described a proposal to hold directors to account for losses incurred up to two years after a company changed hands as “neither equitable nor supportive of proper accountability”.
According to the IoD, “directors should face no ongoing post-sale liability” if other stakeholders, such as shareholders and clients, were broadly supportive of a sale.
The consultation, brought about as a result of the increasing number of high profile insolvencies including BHS and Carillion, closes today.
If you are concerned about your business’ cashflow and the possible negative impact on solvency, our experts at BM Advisory can help. To fully understand your options and responsibilities please call Andy Pear, Mike Solomons or your usual Beavis Morgan Partner.
The sooner advice is taken, the greater the range of options that could be available to you to resolve any issues and get back on the right track.