Director information hub: Duty to co-operate with office-holder
Directors must co-operate with any Insolvency Practitioner (IP) or Official Receiver (OR) appointed as 'office-holder' during a formal insolvency event.
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Responsibilities for directors
An office-holder (IP or OR) is appointed as part of a formal insolvency event and acts as an administrator or liquidator of the insolvent company.
Directors must:
- provide the office-holder with all the relevant company information and paperwork
- attend meetings with the office-holder if needed
- answer all questions related to company activity (normally by completing a questionnaire or submitting a statement of affairs)
The office-holder will use the information to carry out their legal duties in dealing with the administration or liquidation. This includes:
- realising assets
- reporting to creditors
- submitting a report on the conduct of the directors
Reports on director conduct are investigated by the Insolvency Service on behalf of the Secretary of State for the Department of Business and Trade. Any concerns found can lead to a director being disqualified.
Failure to co-operate
If directors do not provide information or attend a meeting as required, the office-holder can apply to the court. The court can order a director to do what the office-holder has requested. There are consequences for not following a court order. This can include:
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A fine
If the court rules in favour of the office-holder and the director does not provide information or attend meetings, they may receive a fine.
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Public examination
In compulsory liquidation cases, the OR can call a Public Examination in court.
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Warrant for arrest
If the director does not attend the Public Examination, the court can issue a warrant for their arrest.