Company Insolvency

[HenryFord]

Hello, If a company goes bust (due to being insolvent) can a director of that company continue being a director of other companies and if so why? I have read that a person will only be barred as a director if the company was wound up and was trading insolvent - but what if a voluntary winding up is made when the company is obviously insolvent and must of been for some time. For example a voluntary winding up of a small business with £1m debts, can the director(s) just setup another company and continue as a director of the new company....and if so why?

[meglet]

A company director will only be disqualified from acting as a company director of a subsequent company if there is proven misconduct in the first company. Companies go bust all the time, it’s a fact of life. Some directors try and trade out of it, when realistically they are just making it worse. But if they acted in such a way as to, for example, make the indebtedness worse, or preferred one creditors over another in paying debts (i.e. trade creditors and not HMRC) then they will be investigated. Disqualification is between 2-15 years.