UK firm collapses lead to insolvency law clampdown

Company bosses who dissolve their firms to avoid paying off staff or meeting pension commitments will risk being hit with fines, under new government plans, reports BBC.

Ministers want tougher insolvency laws, after recent high-profile collapses devastated workers and pension schemes.

The Insolvency Service could also make companies prove they can afford to pay salaries and pension payments if they are also paying dividends to investors.

The TUC says the plan does not go far enough and is “tinkering at the edges”.

The umbrella union wants the government to enforce a more radical overhaul of corporate governance in the UK, which would include honouring its commitment to have workers represented on company boards.

Another part of the government’s proposal will give company bosses more time to rescue struggling firms or attract new funding, in order to safeguard jobs.

The Department for Business, Energy and Industrial

Strategy (BEIS) said that reform was needed due to “a minority of directors who deliberately dodge debts by dissolving a company then starting up a near-identical business, with a new name”.

Business minister Kelly Tolhurst said while the “vast majority” of UK companies were run responsibly, some “recent large-scale business failures have shown that a minority of directors are recklessly profiting from dissolved companies”.

She added: “This can’t continue.” On the steps of Downing Street in 2016, a newly installed Theresa May pledged to “listen not to the

mighty” but to ordinary workers, doubling down on her campaign promise to change the way big business in Britain was governed.

 

UK firm collapses lead to insolvency law clampdown

Company bosses who dissolve their firms to avoid paying off staff or meeting pension commitments will risk being hit with fines, under new government plans, reports BBC. Ministers want tougher insolvency laws, after recent high-profile collapses devastated workers and pension schemes. The Insolvency Service could also make companies prove they can afford to pay salaries and pension payments if they are also paying dividends to investors. The TUC says the plan does not go far enough and is tinkering at the edges. The umbrella union wants the government to enforce a more radical overhaul of corporate governance in the UK, which would include honouring its commitment to have workers represented on company boards. Another part of the governments proposal will give company bosses more time to rescue struggling firms or attract new funding, in order to safeguard jobs. The Department for Business, Energy and Industrial Strategy (BEIS) said that reform was needed due to a minority of directors who deliberately dodge debts by dissolving a company then starting up a near-identical business, with a new name. Business minister Kelly Tolhurst said while the vast majority of UK companies were run responsibly, some recent large-scale business failures have shown that a minority of directors are recklessly profiting from dissolved companies. She added: This cant continue. On the steps of Downing Street in 2016, a newly installed Theresa May pledged to listen not to the mighty but to ordinary workers, doubling down on her campaign promise to change the way big business in Britain was governed.