News |Insolvency

5th October 2021

Duty of directors – a stark reminder

The director of a UK construction company has been disqualified from holding directorships for 7 years due to unexplained expenses.

Cristina Angelica Tasca, from Arbroath, has been banned “from directly or indirectly becoming involved in the promotion, formation or management of a company without the permission of the court” after failing to produce company accounts or records during the liquidation of her Angel Tas Limited construction business.

The 27-year-old was unable to explain more than £716,000 of expenditure, which included £16,000 of cash withdrawals from her company’s bank account, according to a press release from the Insolvency Service.

Liquidators were called in following a winding-up petition from the UK’s tax authorities, after Ms Tasca failed to make obligitary tax payments from 2019 and further failed “to respond to repeated requests for payment”. The liquidators made “numerous requests” to see Angel Tas Limited’s company accounts and records, but Ms Tasca was unable to provide either. As a result, it was impossible to identify the purpose of expenses totalling over £716,000. In addition, liquidators could not “confirm whether the receipts of nearly £700,000 were a true representation of all the company’s sales”.

Ms Tasca’s case was heard in Forfar Sheriff Court on 7th July 2021, following an investigation by the Insolvency Service. The hearing led to the construction boss – whose company specialised in plastering and rendering – being disqualified for 7 years, effective from 27th July 2021.

Such cases act as a stark reminder of the duty of directors, and a warning of the consequences when duties are not upheld. “All directors have a duty to ensure their companies maintain proper accounting records”, commented the Insolvency Service’s Chief Investigator, Rob Clarke, in relation to Ms Tasca’s disqualification. “This includes delivering them to the office-holder in the event of an insolvency.” He referred to the director’s lack of record keeping as a potential “cloak for impropriety”.

A disqualification order is strict and wide-ranging. As well as placing a ban on holding a directorship, disqualification “stops you acting as if you were a director”. The order cannot be avoided through a change of job title/description, nor by instructing other people in the running of a company. In Ms Tasca’s case, her company was incorporated in Scotland, but her disqualification applies across the UK and to businesses with a “sufficient connection” to the UK.

Do you need support with your company accounts?

If you need advice about or support with your company’s accounts and records, ESA Risk can help. Our Consulting and Risk Management teams include experienced chartered accountants, business managers and advisors. ESA Risk consultant Kevin Bennett has held in-house and consultancy positions in a wide range of industries. He specialises in all matters of accounting, including book-keeping and corporation and personal tax returns. Contact Kevin today for the advice and support you need.

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