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Disqualification ends company directorships for Yorkshire father and son

05 April 2012 10:00

Insolvency Service

A father and son duo who ran a Yorkshire engineering consultancy company have been disqualified from acting as company directors for a total of 18 years.

Robert Alistair Harry Adams, 68, of Hawksnest Gardens West, Alwoodley, Leeds, and his son, Peter Robert Adams, 51, of Ripon Road, Killinghall, Harrogate, have given undertakings barring them from acting as company directors, and from managing or in any way controlling a company, following an investigation by The Insolvency Service’s Company Investigation Team in Manchester. Their undertakings are in force until 16 April 2019 (7 years) and 20 April 2023 (11 years) respectively.

The two were the directors of Bob Adams Consulting Engineers Limited, based in Killinghall, North Yorkshire, which went into liquidation on 7 June 2010.

Robert Adams was registered at Companies House as a director throughout the existence of the company, which was formed in April 2005. Peter Adams was an undischarged bankrupt when the company was formed.

He was discharged from his bankruptcy on 1 April 2009, and he was registered as a director of the company from 27 January 2010 until it went into liquidation. However, The Insolvency Service’s investigation revealed that he had been running the company with his father from at least April 2007.

The investigation also revealed that the company was registered for VAT, but had never submitted a VAT return or paid any VAT to HM Revenue & Customs, while it had charged VAT to customers for its services. By the time the company went into liquidation it had debts of £171,840 and assets of £32,660.

In signing the undertakings, the directors did not dispute that:

§ Peter Adams acted as a director of Bob Adams Consulting Engineers Limited when he was an undischarged bankrupt, between April 2007 at the latest and 1 April 2009.
§ They failed to ensure that the company submitted VAT returns and payments to HM Revenue & Customs as and when due, putting HMRC at a disadvantage and benefiting themselves.

Claire Entwistle, Director of Company Investigations North at The Insolvency Service, commented:

“When a bankrupt individual takes part in the running of a company, they will lose the protection of limited liability a company gives them, even if they don’t appear as a director in a company’s formal records – it is their actions that count. They may also be prosecuted. The same applies to their fellow directors who allow this to happen.

“The Insolvency Service will also deal robustly with directors who gain advantage over competitors, and financial benefits for themselves, by operating outside the taxation rules. The protection of limited liability is available to those who comply with their obligations as company directors. If those obligations are ignored, the protection will be withdrawn.”

Ends

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Notes to Editors

1. Bob Adams Consulting Engineers Limited was incorporated on 21 April 2005 and went into liquidation on 7 June 2010.

2. A bankruptcy order was made against Peter Robert Adams on 9 May 2003, following a bankruptcy petition against him by the then Inland Revenue (now Her Majesty’s Revenue and Customs), and he remained an undischarged bankrupt until 1 April 2009.

3. It is an offence for an undischarged bankrupt to act as a director of a limited company, or to take part in the promotion, formation or management of a company, without obtaining permission from a court.

4. A business registered for VAT must submit regular returns to HM Revenue & Customs (normally every three months) of the VAT it has paid on purchases and charged on sales, and must pay any net VAT due at the same time as submitting a return.

5. Disqualification undertakings have the same effect as disqualification orders made by a court, and are therefore legally binding. Without obtaining permission from a court, a disqualified person may not:

  • act as a director of a company
  • take part, directly or indirectly, in the promotion, formation or management of a company
  • be a liquidator or administrator of a company
  • be a receiver or manager of a company’s property

Further information on director disqualifications and restrictions can be found on The Insolvency Service’s website, here.

6. The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver, to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice. Further information about the work of The Insolvency Service is available from www.bis.gov.uk/insolvency.

7. Media Enquiries should be directed to:

Kathryn Montague, Media Relations Manager, Telephone 020 7674 6910 or Ade Daramy, Press Officer on 020 7596 6187

Contact Information

Ade Daramy
Name
Ade Daramy
Job Title
Mr
Division
Insolvency Service
Phone
020 7596 6187
Fax
Mobile
Email
ade.daramy@insolvency.gsi.gov.uk