Written question asked by Jim Murphy (Labour) on Thursday, 1 February 2001, in the House of Commons. It was due for an answer on Thursday, 15 February 2001. It was answered by Kim Howells (Labour) on Thursday, 15 February 2001 on behalf of the Department of Trade and Industry.

Dept of Trade and Industry

Question: To ask the Secretary of State for Trade and Industry, If he will introduce legislation to make company directors personally liable if they continue to trade while they are aware that their company is unable to honour contracts. (Failed OPQ).

Answer: Mr. Jim Murphy: To ask the Secretary of State for Trade and Industry if he will introduce legislation to make company directors personally liable if they continue to trade while they are aware that their company is unable to honour contracts. [149017] Dr. Howells: No. There are already provisions in the Insolvency Act 1986 under which directors of companies in insolvent liquidation may be ordered to contribute personally to the company's assets. This may arise, for example, where the company's business has been carried on with intent to defraud creditors or where the directors have carried on business when they knew or ought to have known that there was no prospect of the company avoiding liquidation.

Secondary information