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Chapter 12

Potential criminal activity in the operation,

management and winding up of companies

Introduction

There are a number of criminal offences that could be undertaken by individuals
concerned in the operation, management or winding up of a company that we have
already covered, such as the failure to file accounts or providing misleading
information to an auditor.

Phoenix companies

S216 and s217 Insolvency Act 1986 (IA 1986) are aimed at so-called ‘phoenix
companies’. They apply where a person was a director or shadow director of a
company at any time in the period of 12 months ending with the day before the
company went into liquidation.

The provisions apply for the five years following liquidation. They prevent the person
being a director of a company with a similar name, or a name which suggests an
association with the previous company, without leave of the court.

It is a criminal offence to contravene the provisions, punishable by imprisonment
and/or a fine. In addition, the director will be personally liable for any debts of the new
company which are incurred when he was involved in its management.

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