The startup/dissolve cycle - who polices this?

[Safe Collections]

So my long winded question is who polices companies house for crooked directors like this that stiff HMRC, creditors and rip off Joe Public at this time of year.

In theory it would be the Insolvency Service, Companies House or the Serious Fraud Office you need with regards to reporting a director. You can get more info on the .gov site here.

In practice getting anyone to investigate the behavior of a director is nigh on impossible. Even if you do manage to rouse the IS to investigate, the chances of said director receiving a custodial sentence is practically non-existent.

If that wasn't bad enough, a majority of the time when a director is convicted of offences under the companies act they aren't automatically banned from forming a further company. Meaning you can be convicted on Monday and incorporate your new company on Tuesday...

The limited company system is broken and has been for a very long time, but as no political will exists to fix it the system remains open to abuse.

[SueEllen]

The only time there seems to be an attempt to strike directors of is when there is enough media attention.

[Willapp]

Yeah policing of directors really needs looking at. A mate of mine is in the process of legal action against a former employer who basically ditched most of his staff without notice or payment, and who is now getting press coverage for his new business venture, ripping off some other poor ignorant souls.

My mate has tried to get CH to investigate this employer (more than one director is involved but the main issues is with one specific guy) but they just don't seem interested despite the reams of evidence he sent including fraudulent invoices that the director raised against him personally once they started action to recover their salaries.

[Maslins]

In theory Companies House do. They can bar people from being a director...but in practice even where they do that, the dodgy character will typically just get a family member to be director of the next company.

Sad state of affairs IMHO, but it seems it's not too hard to get away with this kind of thing fairly long term.

In theory those who feel ripped off could attempt to sue, and if the director had acted negligently/fraudulently then they could be held personally liable. However, if it's consistently small time frauds, it's unlikely anyone will be prepared to fork out the multiple thousand pounds typically required to try to sue.

[Stamkos91]

Good morning CUK,

Thought this might be the best place to get an answer to a question I have.

Up here in Edinburgh a shyster charged folks a fortune for a drive in movie extravaganza only for families to turn up to a half arsed attempt with barely working screens.. A lot of people are out of pocket and it appears the company are now double charging folks. Seems like they did the same in Manchester last year.

Having looked at the company behind it and the front man, theis couple have a history of starting up companies, never filing returns or accounts then starting up a new one under the same director ID has been going on for ten years burning bridges as they go. Whilst the old one is dissolved after a strike off.

So my long winded question is who polices companies house for crooked directors like this that stiff HMRC, creditors and rip off Joe Public at this time of year.

Appreciate any feedback.