Minister for Small Business and Economic Transformation (): The enforcement
activities of the Insolvency Service - tackling economic crime,
disqualifying directors for corporate misconduct and the
winding-up of companies in public interest - serve to protect
market integrity. This, in turn, fosters economic growth by
maintaining a trustworthy environment conducive to investment and
entrepreneurship.
A robust corporate enforcement regime capable of tackling all
forms of corporate abuse is essential for providing a level
playing field for legitimate businesses to thrive and grow. It
encourages good corporate governance standards, provides
confidence to do business and helps attract investment for
companies based in the UK.
Following a comprehensive review of the corporate civil
enforcement framework I have concluded that while disqualifying
directors and winding-up companies remain important for
addressing corporate misconduct, they do not, as they are,
provide the flexibility needed to deal with today's fastmoving
and complex business landscape.
I am therefore publishing a consultation today that contains a
range of options that would modernise the regime and add new
flexibilities for dealing with varying degrees of misconduct.
These options broadly fit into three categories:
Structural Reforms
To modernise the enforcement framework, introducing additional
tools to enhance flexibility and improve efficiency. These
reforms would enable government to address a broader range of
corporate abuse, while supporting a more proportionate and
targeted response to lower-level misconduct. The proposals seek
to accelerate enforcement processes, speeding up the removal of
individuals responsible for corporate abuse, and strengthening
protections for the public and the wider marketplace.
Options include: introducing tailored restrictions for directors
(as opposed to outright bans) when misconduct is due to ignorance
rather than an intent to commit wrongdoing; a faster process to
ban directors from the marketplace where companies have been
liquidated on public interest grounds due to causing harm; and
updating and simplifying disqualification proceedings, by
shifting defended cases from the courts to a tribunal model.
Information Gathering Powers
Strengthening the government's powers to seek and gather
information necessary to support effective and efficient
investigations into corporate abuse. This will ensure powers are
fit for purpose, particularly in light of the new powers
introduced by the Economic Crime and Corporate Transparency Act
2023.
Procedural Changes
Improving and modernising the current procedure for director
disqualification. Making the processes more efficient and
ensuring fairness and clarity for all parties.
Consultation Next Steps
The consultation invites general feedback on the options for
reform, which will inform further policy development and identify
preferred options. The consultation will be open for 12 weeks. I
encourage those interested to respond to this consultation and
use this opportunity to provide their views. The full
consultation is available on GOV.UK
