The following Corporate Crime guidance note Produced in partnership with Micheal Murphy and Amelia Clegg of 23 Essex Street Chambers provides comprehensive and up to date legal information covering:
A company is insolvent where it cannot pay its debts when they are due or its liabilities exceed the value of its assets, or both. When a company becomes insolvent it will be wound up by the Insolvency Service under a statutory scheme which administers the assets of the company and the claims of the creditors fairly.
Under the Insolvency Act 1986 (IA 1986), there are provisions which create criminal offences arising out of unfit conduct by directors where a company has become insolvent. Where a company is being wound up, an officer or contributory of the company commits an offence if they destroy, or falsify any company books or securities, or makes or is privy to the making of any false or fraudulent entry in any register, book of account or document belonging to the company with intent to defraud or deceive any person.
An official receiver will be appointed to investigate the affairs of the company to see why it has failed and will write to the directors of the company to arrange an interview and request that a questionnaire is completed. Official receivers are appointed by the Secretary of State and are officers of the courts
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